Vagit Alekperov: oil prices to remain at current level in 2016

Vagit Alekperov: oil prices to remain at current level in 2016

Lukoil’s President Vagit Alekperov predicted that oil prices will remain at the level of $42-47 per barrel in the next year.

"I was at the meeting with OPEC member-states in Vienna, where I talked with ministers from Iran and Iraq and various analysts. Everyone believes that prices will stand at the current level next year. That is, we mean the existing low price levels of $42-47 per barrel," he said. "Prices will start growing in 2016-early 2017," the head of the oil company added.

According to him, the volume of oil production and consumption level will become equal in 2017, and then the oil price will start growing, though not very fast. "According to our estimates, prices will be about $60 a barrel in the medium term," Alekperov said.

"Mankind will continue looking for new sources of energy, but in the next 40-50 years conventional energy sources – oil, gas and coal – will prevail," TASS cited Lukoil’s President as saying.

Rosneft's Vice President Mikhail Leontyev said in an interview with a correspondent of Vestnik Kavkaza that the Russian government is guided by a forecast of $50 per barrel. As for the price range, Leontiev pointed out that Rosneft expects an increase only in the second half of 2017.

"Now the market is being manipulated, so the prices are falling, because there is an obvious play for a fall, that is, a depreciation of oil. I mean discounted cash flow, Saudi Arabia's entrance into new markets, such as the Eastern European market," Rosneft's Vice President explained.

"Thus, there is no investment in the restoration of stocks, exploration and development of complex fields. Last year the investments of oil companies fell by $250 billion," he said.

Rosneft's Vice President noted that the operational costs of the companies, which are maintaining current production levels at existing fields, are being compensated to some extent. But there will be a shortage of oil if the industry isn't developed," the spokesman noted.

"In the next year Rosneft will set the most conservative rates in order to ensure sustainability. Especially since we can fully ensure the sustainability of the company at any low oil price," Mikhail Leontyev concluded.

Sberbank CIB expects a price of $50-55 per barrel of Urals, the analyst of the company Valery Nesterov told Vestnik Kavkaza. 

Citigroup analysts predicted $60 per barrel of Brent at the end of next year.

According to experts, any victory of Saudi Arabia in the battle for the oil market "will be Pyrrhic", since the fall of oil prices leads to a sharp decrease in revenues. At the same time, the official selling price of Saudi Arabia "shows that the Saudis will not stand by and let other OPEC members take market share," Citigroup believes.

The Russian Ministry of Economic Development, in its turn, believes that the high volatility in the oil market will continue for two or three quarters, then prices will rise, so the baseline forecast of the Ministry of $50 per barrel at the end of 2016 is real.

Russian Economy Minister Alexei Ulyukayev said that the agency has calculated the so-called pessimistic variant of the forecast, which assumes an average oil price of $40 per barrel in the next year.

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