Novak: Brent oil price may exceed $80 by end of year
25.05.2023 14:00
Brent oil price may slightly exceed $80 per barrel by results of the year owing to the growth of demand in summer and OPEC+ output cuts, Russian Deputy Prime Minister Alexander Novak said in an interview with Izvestiya, reported from TASS.
"I think the price will be slightly higher than $80 per barrel and I hope the demand will grow in summer. Because in the summer period, the consumption is higher in transportation and air connections, and agriculture. The output cuts made by many countries today should also influence," he said.
Novak noted that the current prices of $75-76 are due to the assessment of the global macroeconomic situation by markets.
"Why is it below average for this period? Because the market is assessing the current situation, mainly macroeconomic, in the world market. We see very high refinancing rates of the central banks: the United States - today it is, I think, above 5%, Europe - 3.75% and this is what drives down the investment activity and consumption, which is the risk of a lower demand," he said.
As for the OPEC+ session that will be held on June 4, he said this will be the first direct meeting in six months and no new steps are expected.
"If we take the total cuts by Russia, Saudi Arabia, Iraq, United Arab Emirates, Kuwait and other countries, 1.6 million BPD will be cut additionally in May. Our current task is to monitor the situation in the market and react operatively," he said.
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"I think the price will be slightly higher than $80 per barrel and I hope the demand will grow in summer. Because in the summer period, the consumption is higher in transportation and air connections, and agriculture. The output cuts made by many countries today should also influence," he said.
Novak noted that the current prices of $75-76 are due to the assessment of the global macroeconomic situation by markets.
"Why is it below average for this period? Because the market is assessing the current situation, mainly macroeconomic, in the world market. We see very high refinancing rates of the central banks: the United States - today it is, I think, above 5%, Europe - 3.75% and this is what drives down the investment activity and consumption, which is the risk of a lower demand," he said.
As for the OPEC+ session that will be held on June 4, he said this will be the first direct meeting in six months and no new steps are expected.
"If we take the total cuts by Russia, Saudi Arabia, Iraq, United Arab Emirates, Kuwait and other countries, 1.6 million BPD will be cut additionally in May. Our current task is to monitor the situation in the market and react operatively," he said.
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