Russian energy minister: If oil-producing countries do not extend the production-cut agreement, oil prices are afraid to be reduced to half

Russian Energy Minister Alexander Novak said last Friday (June 2) that if the OPEC and its partner countries do not extend the cut-off agreement until March next year, oil prices may fall more than it is now The

Since the OPEC and other oil-producing countries, including Russia, May 25, Vienna agreed to extend the cut agreement for nine months, Brent crude oil prices have fallen by nearly 8%. Monday (June 5) Asian session, Brent crude oil futures rose more than 1% to $ 5.05 a barrel.

As a major negotiator of the cut agreement, Novak said in an interview at the St. Petersburg International Economic Forum last week, “If we do not extend the cut agreement, I believe we will see that not only oil prices will fall by 8%, but probably 50% “He stressed that production growth in other countries will not undermine the agreement or target.

Novark also pointed out that “despite the extension of 9 months is the ‘best choice’, but if necessary, the State party has the means to extend or shorten the agreement.Our task is not the price, our task is to inventory.

“The $ 50 per barrel of oil is good for the market, and the price range will increase by $ 50 to $ 60 as demand increases and inventories fall,” he said.

However, the continued increase in US crude oil production has offset OPEC’s efforts to cut inventories to five-year averages. According to the US government data, last week the country’s crude oil production reached 9.34 million tons / day, since August 2015 the highest level since.

Analysts said OPEC is facing more market share to the US shale oil producers risk, which may lead to OPEC second half of the implementation rate of decline in production.

Earlier on Friday, Russian oil company chief executive Igor Sechin said the agreement would stimulate US shale oil production growth, but destined for long-term decline in oil prices.