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New price balance on oil market should be $80 per barrel - Russian Deputy Prime Minister

December 25, 2014, 23:57 UTC+3 MOSCOW
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MOSCOW, December 25. /TASS/. New price balance on oil market should reach $80 per barrel, Russian Deputy Prime Minister Arkady Dvorkovich told TV news channel Rossiya-24.

“New balance may be within a range of $80 per barrel,” he said.

Falling oil price from $110 per barrel to $80 per barrel can be explained by a dropping global oil demand which is on the decline in Europe amid a higher output by several Organisation of Petroleum-Exporting Countries (OPEC) states and a growing shale oil production in the United States, Dvorkovich added.

The oil price dropping lower than $80 per barrel is explained by two reasons, Dvorkovich said. First, this is a speculative play on oil futures contracts.

“But this pay cannot last for long, because speculative instruments are limited and fundamental factors should restore the price,” Dvorkovich noted. The deputy prime minister noted that price reduction would result in lower investments bringing down global output.

Dvorkovich named a political cause as the second reason for a price falling lower than $80 per barrel. He explained that he regards “the rivalry of producing countries for niches on the market” among political factors.

Oil prices will stay at a low level for several months and can even keep falling, but then balance at the level of $80 per barrel should be established, the deputy prime minister said with confidence.

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