Coronavirus has effectively cut $25 off the price of a barrel of oil, and if the OPEC+ deal was extended, the price would only be $5-$7 higher than now, Russian Deputy Energy Minister Pavel Sorokin said on Friday
MOSCOW (Pakistan Point News / Sputnik - 27th March, 2020) Coronavirus has effectively cut $25 off the price of a barrel of oil, and if the OPEC+ deal was extended, the price would only be $5-$7 higher than now, Russian Deputy Energy Minister Pavel Sorokin said on Friday.
"In our opinion, the real contribution of the coronavirus now to the price drop that we are seeing, if we take the reference point of $60 and the current price of $26-$27, then somewhere around $25 of this drop is the coronavirus impact," Sorokin said during an online discussion of the Valdai Club.
If there were more significant production restrictions by OPEC+, the price could be $5-$7 Dollars higher than now, he said.
"But it's not fact, because we all perfectly understand how the oil market works. When there is excess supply, the price tends to marginal costs," the deputy minister said.
Oil prices have halved since early March due to the expected demand slump related to the breakup of the OPEC+ oil output cut deal and amid the coronavirus outbreak. On Thursday, Norwegian research company Rystad Energy predicted daily global oil demand to fall by 4.9 percent this year to 95 million barrels.
