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Russian energy minister predicts oil price in 2016 to reach $40-50 per barrel

May 12, 2016, 21:59 UTC+3 MOGILEV

According to Alexander Novak, estimations of OPEC countries significantly increasing oil production are slightly exaggerated

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© Yegor Aleyev/TASS

MOGILEV, May 12. /TASS/. The annual average price of oil in 2016 will be in the range from $40 to $50 per barrel, could rise to $50 by the end of the year, Minister of Energy Alexander Novak told journalists on Thursday.

"I believe that this year between $40 and $50 is possible, by the end of the year it could reach $50," he said.

Earlier, Russia’s First Deputy Energy Minister Alexey Teksler said that oil prices will reach $45 per barrel in the second half of 2016 and recover to $65 per barrel by 2018.

"It seems to me the average price will be about $45 per oil barrel in the second half of the year. The figure may be $50 [per barrel] in the next year. We expect the price will recover to $65 a barrel by 2018," the official said.

Representatives of oil producing nations met on April 17 in Doha. Delegations of eighteen countries attended the meeting. The participants failed to reach the production level freeze agreement. Negotiations ended with parties’ statements they need more time for consideration. The parties agreed the OPEC will hold additional consultations with its members that did not take part in negotiations prior to the OPEC summit in June, Russian Energy Minister Alexander Novak said earlier.

Estimations of OPEC significantly increasing oil production exaggerated

Alexander Novak said estimations of OPEC countries significantly increasing oil production are slightly exaggerated. According to Russia’s estimations, growth totals 100,000 barrel per day, he noted

"Estimations of OPEC countries significantly increasing oil production are slightly exaggerated. According to our data, they added 100,000 barrels. I think that in general, OPEC has the possibility to increase it, but it depends on the way they will conduct their policy, each country. Many external factors sometimes affect production volumes - oil pipeline accidents, fires in Canada," Novak said.

It was reported earlier, that OPEC countries increased oil production in April of this year to 484,000 barrels per day (or by 1.5%.) to 33.217 mln barrels per day.

In particular, the production of oil in Iraq in April reached 4.31 mln barrels per day. At the same time, in March the country's oil exports rose to 3.29 mln barrels per day, which is close to the record high of 3.365 mln barrels per day reached in November 2015.

On April 17, representatives of 18 oil-producing nations met in Doha, Qatar to discuss freezing oil production cap, but failed to reach agreement. The meeting participants concluded they need more time to decide on freezing oil production. According to Russia’s Energy Minister Alexander Novak, the oil output freeze agreement was not reached as several countries changed their positions.

On February 16, in Doha, Qatar, oil ministers of Saudi Arabia, Qatar, Venezuela, members of OPEC, and Russia’s Energy Minister Alexander Novak held talks on improvement of the situation with oil prices. The parties expressed readiness to maintain oil production on the level of January of 2016, if other oil producing countries join this initiative.

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