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Monday, October 27, 2008

Energy Ministry urges shift to long-term oil contracts

RBC, 24.10.2008, Minsk 19:28:37. – Russia's Energy Minister Sergei Shmatko believes it would be expedient to switch to long-term oil delivery contracts to stabilize oil prices, the minister stated in Minsk today. The market reacted to OPEC's decision to cut daily oil output by 1.5m barrels of oil with a 7 percent drop in oil price, which he interpreted as a sign of a systemic crisis. He noted that market behavior was inconsistent, and the uncertainty could lead to a downward revision of investment programs by oil companies. And this, Shmatko noted, has to be dealt with. In the long term, he added, oil importing countries should take part in investment programs in oil exporting countries, while at the moment, oil producers are raising funds on financial markets on their own.

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