Russian energy minister sees oil price above $50-60 unreasonable

MOSCOW, Mar 17 (PRIME) -- Oil prices of above U.S. $50–60 per barrel are unreasonable as this price level may relaunch investments in non-efficient projects and raise supply at the world oil market, Russian Energy Minister Alexander Novak told reporters Thursday.

“I think that it is in general unreasonable for the price to go above even $50–$60, as it will once again trigger an inflow of investments in projects that are ineffective under low oil prices, and again there will be an excess of supply, which will again drag the prices down,” he said.

It is also difficult to forecast the effect on oil price dynamics from the freeze of oil production growth, which was agreed by Russia, Saudi Arabia, Qatar and Venezuela in February.

“We should monitor the market’s reaction (to the agreement), because we still see an excess of supply over demand,” Novak said, adding that the freeze was agreed to cut the supply, but the market is influenced by a high number of other factors.

The next meeting of oil-producing countries is expected in Doha on April 17. So far 15 countries have preliminary confirmed their participation in the meeting, he said.

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