Rosneft predicts very low oil prices of USD40 to USD43 per barrel in 2018. Shale oil producers and also U.S. financial markets are likely to exert an impact on oil prices.

“One of the most essential factors, along with the active work of shale oil producers, is the great influence of U.S. financial markets on oil prices. The devaluation of the dollar is now at about 20 percent. To use the corresponding coefficients, the true price of oil is about USD40 per barrel,” Rosneft’s CEO Igor Sechin summed up on September 11, 2017.

At the beginning of 2015, the price of Brent crude oil fell to USD40 per barrel. This year, the lowest price of oil was USD44.3 per barrel, and the maximum price has been recorded at the beginning of this year at USD58.37 per barrel.

Earlier, the Russian Energy Minister Alexander Novak told journalists on the sidelines of the Eastern Economic Forum that the average oil price in 2018 will be in the range of USD45 to USD55 per barrel. The Ministry of Economic Development, in its turn, expects USD43.8 per barrel on average for 2018. The Minister of Finance Anton Siluanov said this summer that Russia budgeted the price of oil at 40 dollars per barrel for the years from 2018 to 2020. The Minister noted that oil prices are influenced by a set of economic and political factors.

“In order to secure the budget against the external risks that we cannot control, we consider it necessary to adhere to a moderately conservative price of 40 dollars per barrel,” Minister Siluanov emphasized.

Expert opinions as to oil prices are varied. The majority of experts think that the forecast Rosneft’s CEO laid out is too pessimistic. For example, the deputy director of the Development Center Institute Valery Mironov said that the average annual price of oil will be higher than officials predict.

The leading analyst of TeleTrade Group Mark Goykhman explained that oil prices depend on the ratio of supply and demand. Secondarily, the prices are affected by market rates, the profitability of financial instruments, and exchange rates. “The limits of increasing the production of shale oil are close to maximum. The U.S. now produces more than 9.5 million barrels per day. Next year, the level will be 10 million barrels. In case there is no sharp increase in OPEC volumes upon the termination of the agreement to cut production, the balance in the market will remain. It will support the prices at approximately the current level of USD50 to USD55 per barrel on Brent oil,” Mr. Goykhman believes.