Oreshkin has commented on oil prices

© RIA Novosti / Maxim to Bogodeeva in photobacteria oil. Archival photoOreshkin has commented on oil prices© RIA Novosti / Maxim to Bogodeeva the image Bank

Oil prices may still fall in the short term, but medium and long — term market expectations stable, said the head of Ministry of economic development of Russia Maxim Oreshkin.

The world prices for oil on Tuesday have fallen by 7-8%, on Wednesday morning continued to decline, and in the afternoon moved to a small increase. On Tuesday the price of Brent crude fell below $ 65 a barrel for the first time since March 16, WTI — below $ 55 per barrel for the first time since November last year. The collapse of quotations has caused concerns about oversupply of oil and weak demand for this raw material after the November OPEC report in which it admitted the oversupply in the oil market in 2019.

«On oil, we can say the following: if you look closely, now the decline in prices is very serious that happened, it occurred in a short section of the forward curve,» the Minister told reporters. He recalled that in April this year was similar to the price of oil on the spot market, but prices for farvagny contracts was 5-10 dollars lower.

«What is happening now is that the deficit in the oil market, which was in the beginning of the year, left and formed a certain surplus. Therefore, the forward curve becomes different, short rates fall, and fall very serious», — said the Minister.

«But, amid doubts about long-term supply from Iran and other long-term structural problems in the oil industry, neconventionale recent years, the «long» part of the curve feels very stable», — he added.

«So here, of course, the volatility may continue, oil prices could fall theoretically, nothing they do not interfere. But the main signal—, medium — and long-term forwards feel stable and are higher than they were six months ago», — concluded..

The economic development Ministry predicts the average price of Urals oil in 2018 at the level of 69.6 per barrel in 2019 — 63,4 USD per barrel. The Ministry assumes that in 2020 the average price will fall to 59.7 per barrel and to $ 57.9 per barrel in 2021.

Oreshkin has commented on oil prices© Infographicsrussia forces in the world oil market