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Russian Energy Ministry predicts oil prices to return to $85-90

November 28, 2014, 18:04 UTC+3

The price is expected to restore in the medium term to a level of $85-90 that will be comfortable for gas and oil companies and exporting countries, the Russian energy minister Alexander Novak said

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© AP Photo/Hasan Jamali

SOCHI, November 28 /TASS/. Russian Energy Minister Alexander Novak said on Friday that lower oil prices would have a favourable impact in terms of expensive projects while the price itself would resurge to a level of $85-90.

“We believe the market will be adjusted and the current reduction and quotation of the oil prices will have a favourable impact in terms of expensive and efficient projects that are going to disappear,” Novak told journalists.

“We expect the price to restore in the medium term to a level of $85-90 that will be comfortable for gas and oil companies and exporting countries,” the Russian minister said. This year the average oil price is expected to be at $98-99 per barrel, he added.

Russia’s energy ministry believes that the budget’s assumed benchmark price of crude oil of $100 per barrel will be adjusted, Novak told the media.

“The 100-dollar price set in the 2015 budget will most probably be revised by the Ministry of Economic Development,” he believes.

Novak said he saw no special problems, because the price incorporated the reserves.

“If the average annual prices in 2015 prove lower, respectively these funds (the margin between the real and expected price of oil) will not go to the Reserve Fund,” Novak said.

Russia’s Energy Ministry believes oil production levels in 2015 will be unchanged, Alexander Novak said.

“For 2015 specifically, we forecast that production volumes will remain at the 2014 level; it is about 525-526 million tons,” Russia's energy minister told journalists.

According to Novak, the decision by the Organization of the Petroleum Exporting Countries (OPEC) to keep production volumes at the same level was expected.

“We did not expect that the decision regarding lowering production volumes will be made,” Novak told journalists.

Russian government plans to spend money from National Welfare Fund to purchase Arctic Yamal-LNG project bonds, Russian energy minister said.

"Key projects will proceed according to plan," minister said.

Alexander Novak added that it is inexpedient for Russia to create oil inventories.

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