Novak: Oil should remain at around 55-60 dollars a barrel in 2017

Novak: Oil should remain at around 55-60 dollars a barrel in 2017

Giacomo Maniscalco
Russia will respect the oil output cut deal set in December, but despite the success of the agreement between Opec and non-Opec countries, it would be premature to talk about a possible extension beyond June

"Russia expects oil prices to stabilize at around dollars 55-60 per barrel in 2017, considering this range a balancing point for the oil market." The forecast comes from the Energy Minister Alexander Novak, during his speech at CERAWeek, underway in Houston, Texas. Novak was welcomed by the President of the conference Daniel Yergin, anxious to discuss Moscow's role in the international energy market. The event was an opportunity for Russia to shed light on some hot spots of the moment: from the Opec agreement on production cuts to the future of energy cooperation with the United States.

The future of oil prices

Yet it is always difficult to make predictions when it comes to oil because "We cannot forget that future price variations will depend on a constantly changing supply and demand, because of the economic growth rates and political factors ... There is a whole spectrum of issues that can affect the market, " Novak stated. According to the Russian minister, however, prices this year will reach a balancing point of around 55-60 dollars per barrel.

It is premature to talk about extending the Opec agreement

As to Russia's commitment within the OPEC agreement, Novak stated that "Russia is respecting its commitments made during the OPEC summit in Vienna last November. We are carrying out - he said - a greater reduction than initially budgeted and results achieved in January and February confirm that we are able to meet the goal of cutting 300,000 barrels of oil by the end of April." What though will happen in June, expiration date of the agreement, remains an open question. "Despite the success of the OPEC agreement, it is premature to talk about a possible extension."

An untapped potential

The question of "Russiagate" and the controversy over the nature of the ties between the Trump administration and Putin have aroused the interest of many on the possible developments of cooperation between the US and Russia in different spheres, including the energy sector. But even in this case, the Russian energy minister glossed diplomatically: "We seem to have a lot of untapped potential in terms of cooperation and synergy".