LUKOIL considers it impossible for the world to exist with the oil price at $30


From the technology perspective the world can not exist with the oil price at 30 dollars per barrel, as it would not be enough of it. Such an opinion was expressed by vice-president of LUKOIL Leonid Fedun in an interview with TASS.

According to him, the oil market is now “quite strange”, and the oil price is hardly related to real processes. In his opinion, the forecast can only be made based on short-term situation.

“It is impossible to predict the price when a herd of investors with animal instincts rushes back and forth. Of course, the market can be pushed down even further, but economically it does not make any sense. This is from the standpoint of speculators. From the technology perspective, the world can not exist with 30 dollars per barrel. There will not be enough oil,”- said the vice president.

In general, in his opinion, the market situation is difficult, and nobody could predict such a deep fall. “We are almost at the bottom now – never before the oil price fell so low, if counted in the prices of 2015,” – he said. Most of the oil that is now produced in the world, has a historical cost above $30 per barrel, said Leonid Fedun. If it remains at this level for a long time, there will be a shortage of oil, and there will be a strong rebound of production.

The top manager also does not exclude the possibility of OPEC to reduce quotas at its next meeting in May or summer. At the same time, in his opinion, the expectation that Iran will enter the market and “flood” it with oil are not justified. As for shale oil, only 2-3 dozen companies will remain in the market and survive “in this price tornado”, said Leonid Fedun.

Earlier on Monday, January 25, the oil trader Pierre Andurand, who predicted the fall in oil prices to 25 dollars per barrel, said that by 2017 it could cost up to $70.

During the Monday trading on the ICE stock exchange, Brent crude oil has risen to 32.72 dollars per barrel (as of 9:30 MSK). The cost of hydrocarbons continues to grow after the speech of the head of the European Central Bank Mario Draghi that took place on January 22. He stressed that the regulator is ready to support the European economy. This gives investors hope for an increase in demand for oil.