Market Leader reports that the global market of rude oil has been seen a prolonged downtrend after a pretty strong rally seen over a couple of months in a row. Not so long ago, a barrel of Brent oil used to cost 86 dollars. At this point, it costs just 70 dollars. Still, the Russian authorities don't seem to be concerned about this price drop at all. Experts say the see no reason to worry about the situation.
According to CEO of Lukoil Vaghit Alekperov, today's oil prices represent a kind of the so-called golden medium. In other words, 70 dollars per barrel is the very price that is acceptable for both oil importers and exporters. When asked about their plans to shrink their oil production to stimulate another price rally in the market of crude oil, the Russian oilers assume there is no reason to do this. Moreover, some of them are going to increase their production amid decreasing oil prices.
This standpoint seems to be shared by the Russian government. Even tough the Russian budget is heavily dependent on the export of crude oil, they somehow don't want higher oil prices. According to Russian Prime Minister Dmitriy Medvedev, much higher oil prices would do the Russian economy more harm than good. The thing is, the Russian budget for 2018 was created with the average annual oil price of $63/b in mind, which is why even $70/b is a good price for Russian.
For those of you who don't know, Russia is one of the biggest oil producers and exporters together with the USA and Saudi Arabia. The Saudis have been producing 11,5 million barrels a day over the recent months while the USA and Russia have been taking turns by producing 11,4-11,8 million barrels a day over the same period.
On November 12, Brent oil is trading slightly over 71 dollars per barrel. WTI oil is trading around 61 dollars per barrel.
