Interfax: Novak considers $50 per barrel most appropriate from supply-demand standpoint

Offshore Oil Rig file photo

MINSK. Feb 25 (Interfax) – Oil prices are unlikely to rise above $60 per barrel and a price of $50 is optimal, Energy Minister Alexander Novak said.

“Speaking fundamentally, the price cannot be high, above $50-$60 per barrel, because in this situation robust investment activity would resume, those projects where investment and production volumes are now falling would be implemented, and prices would drop again,” Novak told journalists in Minsk.

“We reckon that a price of $50 per barrel is the most appropriate from the standpoint of balancing supply and demand,” he said.

Answering a question about how prices for oil could be influenced in possible agreements on a freeze of production volumes, Novak said: “We think that the market itself should react, ministers cannot in any way influence the market. Only when the market feels that there is a fall in supply’s excess over demand, will it react.”

[featured image is file photo of U.S. oil rig]