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Oil prices of $80 per barrel require no urgent measures — Russian energy minister

November 25, 2014, 21:24 UTC+3

Russian Energy Minister Alexander Novak said representatives of Saudi Arabia, Mexico and Venezuela at a meeting in Vienna never named this price as critical

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Alexander Novak

Alexander Novak

© TASS/Dmitry Astakhov

VIENNA, November 25. /TASS/. Oil prices of about $80 per barrel will not require urgent measures, Bloomberg cited Russian Energy Minister Alexander Novak on Tuesday.

Novak said representatives of Saudi Arabia, Mexico and Venezuela at a meeting in Vienna never said it was a critical price.

Participants in an oil conference in Vienna have decided to monitor oil prices for a term of one year with possible quarterly consultations, Russia’s oil major Rosneft quoted its CEO, Igor Sechin, said on Tuesday after four-party talks involving Russia, Saudi Arabia, Venezuela and Mexico.

Venezuelan Foreign Minister Rafael Ramirez said after the talks that participants in the meeting had agreed that the current oil prices were too low. In his words, oil prices should be at the level of $100. “It is a fair price,” he said, adding that Saudi Arabia and Venezuela, both members of the Organization of the Petroleum Exporting Countries (OPEC), had discussed possible production reduction with Russia and Mexico that are not members of that organization. “We agreed to maintain contacts and meet against in three months. The most important thing is what we say,” Ramirez said.

In the meantime, Rosneft’s CEO said that coordinated actions of the majority of big market players were needed to balance demand and supply. At the same time, Sechin noted that the oil industry in most of the OPEC countries differed from that in Russia — due to climatic, logistics and technological factors, Russia could not promptly change production volumes. Instead, in his words, it could take measures of structural character with medium-and long-term impacts.

He said oil prices had plunged by $40 per barrel over the past five months. In terms of price slum dynamics, he noted, the current situation on the oil market could be compared with a global economic recession. But, the global economy and the demand for oil were on the rise, he said, adding that the current market situation featured the lack of a critical imbalance between demand and supply.

He also noted that falling oil prices and postponement of capital-intensive projects might tell on the overall level of oil supply. “The current level of prices is not critical for us. We can well postpone these of those capital-intensive projects. Naturally, it will tell on the overall level of oil supply,” Sechin said.

In his words, his company had already reduced oil production by 25,000 barrels a day. This move however was linked with the company’s measures to boost the efficiency of oil production and profitability for the company’s shareholders, and with terms of market sales.

Market players should react quickly to market changes that is why it would be expedient to make joint analysis of market factors and outlooks and do it regularly, he said, adding that more transparency of the market was needed too.

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