Dvorkovich: the decline in oil prices will be short-lived, falling investment in mining will raise them

Dvorkovich: the decline in oil prices will be short-lived, falling investment in mining will raise them

MOSCOW, December 28. Deputy Prime Minister Arkady Dvorkovich expects that the investment reduction in production will raise oil prices. Such a forecast he made in an interview with TV channel “Russia 24”.

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“I think this (decline in oil prices – approx.) may not last too long, because how many months, any time any company, any country can withstand such a low price. But then will inevitably go down investment, and therefore will decline and prices will rise,” he said.

The fall of Brent crude prices from the highs of June 2014 close to 70%. In December 2015 Brent crude dropping to its lowest level since 2004, falling to $36 per barrel. For comparison, in December 2008 the price of Brent crude fell to $36,2 per barrel, down 75% in 5 months.

Oil prices accelerated their decline after the OPEC meeting on December 4. According to the results of 168-th meeting in Vienna Ministers of oil of the OPEC has not taken a clear decision on production quotas because of the position of countries that are not members of the organization. Currently the volume of oil production by OPEC members is estimated to be 31-32 million barrels/day. The previous quota was 30 million barrels a day.

The anti-crisis plan of the government

The fall of the Russian economy in 2015 was lower than in the crisis year 2009. “So, overall, the implementation of anti-crisis plan was relatively successful,” he said.

Vice Prime Minister also stressed that measures to support the Russian economy will be extended in 2016. “Many of the programs that we started in 2015 to continue in 2016: to support the automotive industry, transport engineering, light industry, housing and, of course, agriculture,” concluded Deputy Prime Minister.

Earlier, replying to a question during a press conference, Russian President Vladimir Putin called satisfactory the work of the government this year. “Analysis of just what has been done suggests that 35 percent is more than one third – planned actions in the plan, unfortunately, has not yet been implemented”, – said Putin. “But overall, strategically, the government is making the right steps and act effectively”, – said the head of state.

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From high to collapse: the dynamics of oil prices since 2000