Russian minister says early to speak about more oil cuts

By Azernews

By Gunay Camal

Russia’s Energy Minister Alexander Novak has announced that it is too early to talk about the expediency of extending the OPEC oil output cut deal.

Additional time and first of all, additional analysis of the market situation is needed for making a decision on more cuts, Novak told RT following the Joint OPEC/Non-OPEC Ministerial Monitoring Committee (JMMC) meeting in Kuwait.

The Joint OPEC/Non-OPEC Ministerial Monitoring Committee (JMMC) convened in Kuwait City for its second meeting on March 26. It announced that, based on the Report of the Joint OPEC/Non-OPEC Technical Committee (JTC) for the month of February 2017, OPEC and participating non-OPEC countries have continued their progress towards full conformity with their voluntary adjustments in production.

As of February 2017, the OPEC and participating non-OPEC countries achieved a conformity level of 94 percent, an increase of 8 percentage points over the January 2017 performance.

“It is only the end of March. The exchange of views held by ministers and the proposals which were put forward during the meeting mean that all the participating countries have an opportunity to consider this issue till the next ministerial meeting, give instructions to OPEC secretariat on providing additional market analysis for January-April, give forecasts on implementation in May, June and for the second half of 2017,” he said.

Novak pointed out that during the meeting, it was agreed to hold Russia-OPEC dialogue in Moscow on May 31.

Regarding the oil price, the Russian minister said that it depends on the market situation, as well as the demand and supply balance.

Meanwhile, oil prices dipped on Monday as rising U.S. drilling activity outweighed talks that an OPEC-led production cut initially due to end in mid-2017 may be extended. Since mid-2016, U.S. oil production has risen by 700,000 bpd, or 8.3 percent, to 9.13 million bpd, government data shows C-OUT-T-EIA.

In late 2016, OPEC and non-OPEC producers reached their first deal since 2001 to curtail oil output jointly and ease a global glut after more than two years of low prices.

OPEC agreed to slash the output by 1.2 million barrels per day from January 1, with top exporter Saudi Arabia cutting as much as 486,000 bpd.