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Oil prices recovery to take several months, says energy minister

The recovery of oil prices will depend on a number of factors, Alexander Novak said

MOSCOW, March 10. /TASS/. Russia’s Energy Ministry expects oil prices to recover after Monday’s crash within several months, Minister Alexander Novak said in an interview aired by the Rossiya-24 TV news channel on Tuesday.

"As for futures recovery, I think it will take several months," he said.

The recovery of oil prices will depend on a number of factors, the minister said. "I think that first of all it is necessary to estimate the developments regarding the measures assumed by countries to prevent the coronavirus spread and protect against the epidemic. That influences the demand and consumption. And that will largely depend on how the economy recovers as a result of neutralizing the situation in this regard," he explained.

Moreover, additional demand for oil and petroleum products in the period of low prices is another factor that is expected to influence the market, Novak added.

On Monday, the price of futures contracts of Brent crude oil for May 2020 delivery plunged by over 30% on London's ICE, with the lowest level reached being $31.02 per barrel. On Tuesday, the price of Brent futures contracts has narrowed losses adding 4.7% to $36.02 per barrel as of 12:20 am Moscow time, while the price of futures contracts of WTI crude oil gained 5% to $32.7 per barrel.

The oil price fell amid the news that OPEC+ countries failed to agree on an additional reduction in oil production amid sliding demand due to the coronavirus in Vienna. OPEC proposed to deepen production cuts by another 1.5 mln barrels per day until the end of this year. However, Russia and Kazakhstan opposed the proposal.