Russia to support raising OPEC+ output by 1.5 mlb bpd in Vienna

MINSK, Jun 19 (PRIME) -- Russia has suggested raising oil output under the OPEC+ agreement by 1.5 million barrels per day, and will support it during the Thursday–Saturday meetings of ministers of OPEC and non-OPEC states in Vienna, Energy Minister Alexander Novak told reporters on Tuesday.

“We suggested studying this possibility at the meeting, as we think that the current figure of 2.8 (million barrels) is too much. We’ve over-fulfill the agreement even more now than before. The market is growing, consumption is growing, and we see that the balance of the market and oil stocks are lower than average five-year figures. That is why we will support the suggestion,” he said.

Saudi Arabia is working on its own proposals, and ministers of the two countries are to discuss them at the meeting of a ministerial monitoring committee on Thursday. The oil production quotas per company will be also discussed at the meetings of OPEC and non-OPEC states later this week, he said.

It would be reasonable to raise oil production just for July–September, as demand for oil is usually the highest in a third quarter of a year, so production should be raised in order to avoid oil deficit. It would be wrong to approve an increase of oil output for a longer period like six months or a year, he said.

No country that participates in the agreement of OPEC and non-OPEC states said that it would veto a possible increase of the oil production. Russia hopes that participants of the agreement would make a sensible decision for the sake of the global oil market, Novak said.

The oil price is balanced now. “You see, even despite the fact that media have been reporting this information about the discussion for some time, the market has been reacting to that in a calm way. The price (changes) are within two dollars around U.S. $75–74,” he added.

In November 2016, OPEC and non-OPEC states agreed to reduce their oil production to rebalance the market. Russia joined the agreement in December 2016 with a promise to cut output by 300,000 barrels daily compared with the level of October 2016. The agreement was prolonged until the end of 2018 in November 2017.

End