$ 50 per barrel: Novak forecasts a decline in oil prices

Oil prices will decline to $ 50 per barrel, the energy minister Alexander Novak outlined the horizon. Saudi Arabia is set at $ 80 per barrel.
Origin source
"In a long-term trend, the price of oil will be around $ 50 per barrel. That is, the current situation with an increase in prices to $ 70-80 is including a conjuncture nature, "said Minister of Energy Alexander Novak at a meeting with the Prime Minister (quoted by TASS). Now the price of a barrel of Brent brand on the Intercontinental Exchange is about $ 79 per barrel.

Expectations of the Ministry of Energy coincide with the forecasts of the Bank of Russia on the reduction of oil prices to $ 55 per barrel in the next four years of the year. The basic scenario of the Central Bank is guided by the average price for Urals oil at $ 69 per barrel in 2018, $ 60 per barrel in 2019 and $ 55 per barrel in 2020-2021. Among the factors contributing to lower oil prices, the Bank of Russia calls for a relaxation of restrictions on oil production within the framework of the OPEC + agreement and an increase in shale production. Nevertheless, the Bank of Russia does not rule out that oil prices may be near the current level "for a long time".

Competition of forecasts

According to sources from Bloomberg, Saudi Arabia considers $ 80 a barrel to be an acceptable price for Brent oil in the short term due to US sanctions against Iran and a decrease in the country's supplies to the foreign market. The Kingdom wants to keep the price of oil in the range of $ 70 to $ 80 per barrel amid the postponement of the IPO of the national oil company Saudi Aramco and the need to finance several large oil production projects, Reuters reported earlier referring to its sources in the country's government. And US President Donald Trump even accused OPEC of manipulating prices. But Saudi Energy Minister Khaled al-Faleh said that neither OPEC in general, nor each of the countries individually set the goal of setting a specific price for oil.

Now, the tension in the oil market is growing for a number of reasons, according to the International Energy Agency (IEA). "If the export of oil from Iran and Venezuela continues to fall, the situation in the markets will become tougher, and prices may begin to rise," IEA analysts say.

However, the long-term trend of oil prices - to reduce, regulators agree. The Ministry of Energy believes that the global demand for oil will gradually decline, and the competition between countries for monetizing hydrocarbon reserves and stimulating oil production will increase.

Dead load of oil reserves

At the same time, Russian oil production may begin to decline, officials warn. This will happen if the government does not stimulate the growth of labor-extracting resources, the transcript of the government's meeting on the development of the oil industry, which took place on Tuesday, September 18, follows.

"If we do not do anything, we will not develop deposits that are difficult to extract, then by 2035, under the optimistic scenario, we will produce half as much, and pessimistic - almost four, to 146 million tons," he noted. meeting in the government, Deputy Prime Minister Dmitry Kozak.

The Russian government plans by November 1 to prepare a "roadmap" for the inventory of deposits to further establish differential tax rates. This map will allow starting from next year to start moving to the development of those deposits that currently lie dead weight on the balance of oil companies and are not being developed, Kozak said.