Energy minister sees 2018 average oil price at $70 per barrel

SINGAPORE, Nov 14 (PRIME) – An average oil price for 2018 is likely to amount to U.S. $70, and OPEC and non-OPEC states have instruments to react to a crisis on the market, Russian Energy Minister Alexander Novak told reporters on Wednesday.

“If we take the average price for the oil, it stands at about $70 as of today. We should look at it in dynamics like we’ve agreed at the latest meeting of ministers of the monitoring committee that we had last Sunday in Abu Dhabi,” he said.

The ministers agreed to monitor the market in November and meet at the beginning of December to discuss the market situation. “We have instruments to react to cases of crisis events. Currently, we made no decisions as too little time has passed and there are too many factors of uncertainty on the market, we have to study these uncertainties additionally,” he said.

Russia is not raising its oil production, and sales of Russian oil on the global market do not lead to reduction of prices.

“Today is the 14th day of the month. Our average production in these 14 days is approximately 20,000 barrels less than we had in October. Russia is not raising its production, we are adjusting it slightly. We are not exerting pressure on the market, Russian supply does not contribute to the reduction of prices,” he said, adding that the country’s November oil output will remain close to the October output.

“There is a possibility for an oil supply surplus in the winter due to lower demand, but it happens each year. The situation in summers is usually the opposite. So, one should always monitor fundamental factors in evaluating the balance of demand and supply at the oil market,” he said.

The U.S. sanctions against Iran also make the market volatile right now. In spite of introduction of a softer round of sanctions, there are still many uncertainties around the measures, and the market is yet to understand the impact of restrictions on its operation, Novak said.

In November 2016, OPEC and non-OPEC states agreed to reduce their oil production to rebalance the market. Russia joined the agreement to cut the output by 300,000 barrels daily as compared with the level of October 2016. In 2017, the deal was prolonged until the end of 2018. In June, the participants decided to raise the output by 1 million barrels of oil per day.

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