Russia’s Lukoil exec sees average oil price in 2017 at $60

MOSCOW, Dec 2 (PRIME) -- An average annual oil price will stand at about U.S. $60 per barrel in 2017, Leonid Fedun, vice president for strategic planning at Russian oil major Lukoil, told reporters on Thursday.

“It is more profitable for any economic entity to produce, say, 10 million tonnes of oil at a price of $50 per barrel than 13 million tonnes at $40, as it receives a fairer price for the non-renewable source. Plus, you save money on significant expenses for production of these additional barrels,” he said.

“I can say with a large degree of certainty that the price of $60 will dominate next year.”

In its presentation on development of the world oil market until 2030, Lukoil said that an average annual oil price of $80 per barrel is necessary to balance supply and demand. Fedun said that “the golden price” of $80 will also ensure the level of resources adequate to satisfy demand in the next 10–15 years, but it does not prompt development of alternative technologies.

Still the market of “paper” oil significantly exceeds physical trading in oil, meaning that market volatility will remain high, he said.

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