Analyst: Forecast for oil prices depends on coronavirus spread
TEHRAN, Iran, March 30
Forecast for oil prices and possible production output cut will depend on coronavirus spread, Iranian oil analyst Nersi Ghorban told Trend.
"Oil price drop was due to economic recession and fall of oil demand, while the developed and developing countries have nearly stopped functioning due to coronavirus spread," he said referring to reasons for reducing oil price in recent weeks.
"While OPEC tries to compensate the situation by reducing production, Russia did not agree with output cut. This has created problems that intensified the drop of oil price," he added. "Predicting oil price is not possible, since we do not know where the coronavirus situation is headed to."
"In case we overcome coronavirus in next six months, there will be possibility for economic resumption, but if the virus continues to spread until winter, the oil price would remain the same rate," he said adding that although there is no possibility for further drop of oil price, there will $20 to $30 fluctuation in the price.
The analyst went on to say that the budget for the new Iranian year (began March 20, 2020) forecasted sale of one million barrel of oil per day at the price of $50 per barrel. In his words, the budget shall be reviewed again and other alternative income sources should be found.
"The situation has changed, so it is not clear what may happen, but we should review the budget," he added. "It's certain that with price of $30 barrel of oil, exports will be very limited and the demands will be low."
"As for the between Iran and Russia and the agreement with Saudi Arabia for output cut to increase oil price, it's possible that Russia and Saudi Arabia would discuss the issue, the question is whether they willn cooperate," Ghorban added.