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Novak: It is difficult to predict oil prices amid Middle East tensions

UNITED STATES (OBSERVATORY NEWS) — Russian Energy Minister Alexander Novak said on Wednesday that it is extremely difficult to predict the price of oil in light of tensions in the Middle East, including the US-Iran conflict.

Novak stressed that “it is necessary to continue to monitor the development of the situation in the Middle East,” according to the Russian “TASS”.

And at dawn on Wednesday, the Iranian Revolutionary Guard announced targeting two American bases in Iraq with dozens of ballistic missiles, in response to the killing of General Qassem Soleimani, commander of the “Jerusalem” Corps, with a US raid in Baghdad last Friday.

In response to the attacks, US President Donald Trump said, at a White House news conference, that his country had not suffered any casualties from the bombing, while the two bases suffered only minor damage.

Trump has brandished more sanctions against Iran.

In the same context, the Russian minister considered that the current issue does not require holding an extraordinary meeting of the “OPEC +” coalition due to the developments of the situation with Iran.

“We must discuss and monitor the situation,” Novak said. “We always have an opportunity to meet, if necessary.”

Brent futures rose to a peak in 8 months to an average of $ 70.8 a barrel, driven by an Iranian military strike on two US bases in Iraq, before its gains were reduced to an average of $ 67.6 by the time (15:22 GMT).

The “OPEC +” agreement on reducing oil production has entered into force since the beginning of 2017 and has been repeatedly extended.

According to the current agreement, Russia had to cut production by 228,000 bpd in 2019.

And Russia should reduce its production by 300 thousand barrels per day in the first quarter of 2020, after agreeing at the beginning of last month, to deepen the reduction of OPEC + production by 1.7 million barrels per day in the first three months of this year.

And recently, the Russian Energy Minister said that his country’s budget received additional revenues from the “OPEC +” agreement worth 6.2 trillion rubles (99.7 billion dollars) within 3 years.

“Fitch” considered in a statement on Wednesday that the oil markets have sufficient supplies, thanks to the continued growth of production in the United States, Brazil and Norway, in addition to its expectations for the continued slowdown in the growth of the global economy.

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