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Former finance minister doubts oil price of $60 per barrel possible in short term

January 13, 16:55 UTC+3 MOSCOW

On December 10, 2016, OPEC and non-OPEC countries signed an agreement on joint reduction of oil output

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© Yuri Smityuk/TASS

MOSCOW, January 13. /TASS/. Chief of the Center for Strategic Research (CSR) and ex-Finance Minister Aleksei Kudrin said one should not count on a stable oil price around $60 per barrel as the United States will expand shale oil production, which will restrain its cost growth despite the agreements on crude production cut.

"It’s clear that the US will expand shale oil production, which will substantially change the situation on global oil markets. I think one should not count on a stably high oil price of $60 (per barrel) and higher," he said, adding that he expects the price for oil to be "around $40 and $60 in the next 5-10 years."

According to Kudrin, all decisions related to the reduction of global crude output are usually short-term and imply a 1.5-year period.

On December 10, 2016 OPEC and non-OPEC countries signed an agreement on joint reduction of oil output at a meeting in Vienna. Also, 11 countries will join the announced cut by OPEC members of 1.164 mln barrels per day in the first half of this year, and reduce production by another 558,000 barrels per day. Thus, the total crude oil production cut will amount to 1.7-1.8 mln barrels per day. Russia plans to cut its oil production by 300,000 barrels per day in the first half of this year.

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