Russia's economy minister: oil price can go down further

Russia's economy minister: oil price can go down further

Russia’s Economic Development Minister Maksim Oreshkin commented in the situation with oil prices.

He believes that oil prices can go even lower in the short run, though they will remain at a higher level in the longer term. "Of course, the volatility can remain, theoretically oil prices can go even lower, however, the key signal is that the mid-term and long-term forwards are stable and higher than they were half a year ago," TASS cited him as saying.

According to the minister, oil prices on the spot market are currently at April level, whereas forward prices of oil were below $5-10 at that time.

"The deficit on the oil market that we evidenced at the beginning of the year is gone, and a slight surplus is being formed. That is why the forward curve is changing as short prices are plunging, whereas a long part of the curve is very stable amid uncertainty over long-term supplies from Iran and a number of other long-term structural problems in the oil sector, underinvestment of the past several years," Oreshkin explained.

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