Oil in mid-$60 per barrel range fair, Russian company says

Dec. 1 (UPI) -- A price range for crude oil of between $60 and $65 per barrel is a good point on which to base a budget, the head of Russian oil company Lukoil said Friday.

CEO Vagit Alekperov said Friday that, for ministers from the Organization of Petroleum Exporting Countries and non-members, the mid-$60 range was preferable for now.

"The budget for 2018 is based on $60 dollars [per barrel]," he was quoted by Russian news agency Tass as saying.

Russia is party to an effort led by OPEC to balance an oversupplied market with coordinated declines in production. Russia is the largest contributor to the agreement outside of OPEC and helped steer negotiations this week that led to a nine-month extension to a deal set to expire in March.

From Vienna this week, Russian Energy Minister Alexander Novak helped maneuver some wiggle room in the declaration of cooperation with a call for a June opening for further adjustments to a deal that sidelined about 2 percent of the global demand for crude oil.

Alekperov earlier this year said he believed a mid-summer drop in crude oil prices was temporary, but expressed concern about volatility. From his standpoint, a stable price point upon which to base investment decisions was necessary.

At a June economic forum in St. Petersburg, Alekperov said a decision from OPEC and other parties to the agreement to extend, rather than change, the agreement was enough to stabilize the market.

Speaking Friday, the Lukoil boss reiterated his call for routine monitoring in order to keep volatility at bay.

"I hope that ministers will meet once again at the end of spring and once again discuss the situation on the market," he said. "I do not support a sharp rise in the oil price."

A sharp rise in crude oil prices may undermine the effort to balance an oversupplied market as producers outside the agreement, like the United States, ramp up their activity to capitalize on improved prices.

The price for Brent crude oil was around $63 per barrel early Friday, up about 20 percent from this time last year.