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Lukoil CEO blames traders for temporary oil price decline, fears sharp price hike

MOSCOW, June 21. /TASS/. President of Russian oil major Lukoil Vagit Alekperov believes that the temporary decline in oil prices was caused by speculators on the market and fears its sharp growth.

"We all, including analysts and organizations, believe that this is because of speculators. The oil market is growing. We have increased our sales on the market of European oil products. The US market is growing, the reserves are decreasing, according to OPEC. The fact that today the price is falling, this is because of the presence of speculators, "he told reporters, adding that stability of prices is important for the company.

"We are afraid, of course, that there can be a sharp growth in the future, we need a stable price that allows us to form our investment program and encourages consumers to burn our fuel," Alekperov said.

On June 20, the price of Brent crude oil fell by more than 2% below $ 46 per barrel. The last time this oil price level was fixed on November 29, 2016.

In December 2016, the OPEC summit decided to reduce the oil production of the cartel by 1.2 million barrels per day in the first half of 2017. Amid the news about the oil output cut deal the price of Brent crude increased by more than $10 in a short period of time. Since then the oil prices exceeded $50 a barrel until early June.

In late May, OPEC and 11 independent oil exporting countries extended the oil production cut deal by another 9 months - until April 2018, in the hope that global oil reserves will fall to the five-year average level by the end of 2017.

The sanctions 

The lawyers are still studying the possible expansion of the sanctions list by the United States and so far they do not see any consequences for the company, Alekperov stressed:

"Our lawyers are now studying new sanctions. It is all very vague. So far they have not been able to give us a specific analytical comments, according to their preliminary report we have no restrictions."