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Director, Institute for social and economic research, Finance University under the government of the Russian Federation Alexey Barb told about the dynamics of oil prices in the short term.
He believes that the recently concluded transaction of member countries of the OPEC format will allow you to avoid disaster in the energy market. However, Barb said that in the near future should not expect a recovery in oil prices at the same level.
“some recovery of the oil market will probably be in the second half of the year, and eventually he likely will be restored in 2021,” he said Prong in an interview with radio Sputnik.
He noted that the cause of the fall of prices was actively expanding technical capabilities for increasing the production of energy in the period from 2010 to 2014. At that time oil was over 100 dollars, which provoked large investments in the industry.
“If all countries then kept rates at a lower level, this would not have happened. Now you need a few years to withdraw from the market excess capacity for the production of oil,” said Barb.
He added that the level of participation of major oil-producing countries has not decreased, therefore in the energy market there is a surplus of the product. In addition, the coronavirus pandemic has also affected the demand for black gold.
“Oil is primarily a transport, but air transport will be restored not earlier than 2021. We have quite a difficult period of low oil prices,” said Barb.
He predicted the natural decline of oil production in the next few years, because contain expensive projects for the development of this sector would be unprofitable due to the low cost of black gold.
on 12 April, the deal signed between the OPEC countries were in force. It became known that the agreement implies a reduction of oil production at 10 million barrels per day since may 1. In the future we plan a gradual decline in productionodsta black gold by 18% (to the end of 2020), and then to 14% (until the end of April 2022).
Russian President Vladimir Putin welcomed a deal between OPEC+. The press Secretary of the President Dmitry Peskov said that the talks ended in compromise between the 22 countries.
the head of the energy Ministry of Russia Alexander Novak said that the way out of the current situation in the oil market will last at least until the end of 2020. Vice-President of “LUKOIL” Leonid Fedun said that after the implementation of the agreement, the price of oil will remain at 30-40 dollars per barrel.
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