MOSCOW (Sputnik) — Global oil prices are unlikely to return to triple digits following a milestone decision among producers to cut output, but $60 per barrel is reasonable to expect in the short-term, Russian Energy Minister Alexander Novak said Wednesday.
"It is unlikely that we will see price increases to a level that was in 2014, which was more than $100 per barrel," Novak said in an interview with the Rossiya-24 broadcaster.
Asked if analysts' forecasts of a $60 per barrel price were justified, Novak said he expected the prices to reach that mark in the short-term.
The global market is likely to get rid of excess oil supply in the latter half of next year, Russian Energy Minister Alexander Novak said Wednesday.
"According to our estimates, this surplus could go away in the end of 2017, the third or fourth quarter. Then we can talk about market recovery," Novak told Rossiya-24.
In terms supply and demand balance, the market is expected to see the withdrawal of surplus oil amounting to 1.5 barrels per day by January 1, 2017, if producers adhere to the agreement, he added.
"Accordingly, the market will balance and there will even be a shortage of supply in relation to increasing demand," Novak forecast.
No Grounds to Doubt Countries' Non-Compliance With Oil Output Pact
There is currently no reason to believe that any of the oil-producing countries would violate the latest agreement to cut production, Novak said, noting that the current number of signatories is enough to boost prices.
"Currently we have no reason to believe that someone would act differently, not in accordance with the agreements that we reached in Vienna between OPEC and non-OPEC countries," he said.
He stressed that the 24 countries that have joined the landmark agreement to shore up plummeting prices is a sufficient figure to achieve stated goals.
"This is a fairly large number of countries, whose total volume of production is about 55 million barrels per day, representing about 60 percent of the world output total," Novak estimated.
The Organization of the Petroleum Exporting Countries (OPEC) agreed to cut oil production by 1.2 million barrels per day to 32.5 million barrels per day starting next year.
Non-OPEC countries met in Vienna two weeks ago to agree on production cuts of 558,000 barrels per day, with Russia's share totaling 300,000 barrels per day.
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