Russian Energy Minister Novak is "Comfortable" with $50 oil going forward. His statement speaks volumes.

[BLA + 1,666]

During an interview after Wednesday's OPEC+ Technical Meeting Novak stated Russia is "comfortable" with $50 bbl oil going forward.  Is this the new benchmark price target ? 

Edited June 19, 2020 by BLA

[Jay McKinsey + 1,489]

5 minutes ago, BLA said:

During an interview after Wednesday's OPEC+ Technical Meeting Novak stated Russia's "comfortable" with $50 bbl oil going forward.  Is this the new benchmark price ? It is as far as Russia is concern.

It's interesting how Russia has always been reasonable and realistic when it comes to pricing oil.  Same can not be said about OPEC , especially Saudi Arabia. 

Additionally , IEA  has stated that $45 to $50 oil will allow most U.S. shale producers to operate profitably. 

A few weeks before the CV19 demand destruction oil was trading btw $52 to $48.  Was pice finding its supply / demand equilibrium at this time ?  I think so .  

The $1.7 trillions dollar question is how does Saudi Arabia (1) respond to Novak's  Wednesday comments on Thursday (if they comment at all) . (2) Can Saudi Arabia survive as we now know it when oil trades in the low $50s ?

 

 

Russia has said their break even is $42 for a long time. They can survive nicely at $50 and that price keeps KSA hurting and US shale at a modest level.

Edited June 18, 2020 by Jay McKinsey

[Dan Clemmensen + 1,011]

I'm trying to be optimistic and think about the post-Covid-19 era, pretending that we will recover to roughly where the US economy was at the end of 2019. Yes, I know it will not be that simple, but it makes a fairly good baseline.

My question: after any needed restructuring and/or consolidation, can the US continue as a net oil exporter at the $50/bbl Brent price point?  The US was a net importer for 50 years, finally getting back to breakeven just before Covid-19 struck.

Secondary question: under the assumptions of a flat 100 million bbl/day world demand, flat US demand at the 2019 level, and $50/bbl Brent, how long can the US continue as a net exporter? Is this driven by Permian production?

I ask because low oil price and net exports seem to correlate with a robust economy and low inflation. As a net exporter we are also closer to being insulated from OPEC oil shocks.

[kommersant + 13]

I know Russia is called gas station but lets  check oil rent acording to World Bank

RUSSIA about 7% of gdp

KSA about 25% of gdp

Russia simply has more diversified economy and large black economy taxed after 2014. Thats all I want to say.

But they would like 70 $ rather than 50.

I think oil producers will finally  get this price but not in 2020 or 2021.

Edited June 18, 2020 by kommersant