The OPEC+ deal will not prompt an immediate sharp rise in oil prices, but should the international community manage to curb the COVID-19 outbreak, it is possible that prices could rise to between $40 and $45 a barrel, Russia’s Gazprom Neft CEO Alexander Dyukov said, APA reports citing Sputnik.
“Of course, one should not expect a sharp increase in prices given the results of the deal. We continue to believe that the second quarter of 2020 will be the most difficult, but we hope that the removal of lockdown measures and the resumption of trade will take place in the summer, meaning that oil can reach its pre-crisis price by fall”, Dyukov stated in an interview with the Kommersant newspaper.
The Gazprom Neft CEO added that oil prices could reach $45 per barrel by the end of the year and expressed a positive outlook for the future.
“In such an optimistic scenario, the price could reach between $40 and $45 per barrel by the end of the year, with further growth in 2021”, he said.
According to the CEO, the OPEC+ deal is not set in stone and allows for adjustments depending on current market conditions. He said that Gazprom Neft is prepared for all market eventualities.
On Sunday, OPEC+ signed a landmark deal that commits member nations to reduce crude oil production by 9.7 million barrels per day in May and June. Thereafter, production will be cut by 7.7 million barrels per day until the end of 2020, and by 5.8 million barrels daily from January 2021 until April 2022.
Brent crude oil futures closed at $31.74 per barrel on Monday.