Putin: Russia expects Jul–Dec 2017 oil price to stabilize at $55

MOSCOW, Dec 23 (PRIME) -- Russia expects the oil price to stabilize around the current level of about U.S. $55 per barrel in July–December 2017, President Vladimir Putin said on Friday in an annual news conference.

“We assume that the oil glut will leave the market in the second half of 2017 and the price will stabilize. We expect it to stabilize around the current level,” he said.

OPEC and 11 non-OPEC countries, including Russia, agreed on December 11 to cut combined oil production by 1.8 million barrels a day in January–July 2017 in order to balance supply and demand. OPEC will reduce output by 1.2 million barrels daily, while Russia is to decrease production by 300,000 barrels.

The agreement of oil producing countries will lead to higher oil prices, while a $10 increase of the price from the $40 included into the 2017 federal budget will add 1.75 trillion rubles to state coffers.

“I would like to tell you that if the current situation maintains…a $10 difference in oil prices will mean 1.75 trillion rubles of additional income for the budget. And for oil companies it will also mean an additional income of 750 billion rubles despite the production cut. Everybody wins in the end,” he said.

The result was made possible only thanks to cooperation with OPEC. “We will continue working with OPEC in fulfilling our liabilities,” he said.

Cooperation between OPEC and non-OPEC states is good for everyone, he said.

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