Russian min says sees OPEC non-OPEC pact within reach mid-Mar

MINSK, Feb 25 (PRIME) -- OPEC and non-OPEC oil producers can agree to freeze oil output in mid-March at an energy ministers’ meeting, Russian Energy Minister Alexander Novak told reporters on Thursday.

“As far as we understand, OPEC countries plan to hold a meeting between ministers of OPEC and non-OPEC countries and they plan to hold it in mid-March. And there, the decisions can be formalized with some mutual statements, joint papers and so on,” Novak said.

Novak confirmed his participation in the upcoming meeting.

Last week, Novak agreed to keep oil output at January levels on average in 2016 with Saudi Arabia, Qatar and Venezuela. Some other countries joined the initiative while the U.S. and Iran refused to participate.

Novak said that the oil market misbalance will reduce in one year if large producers commit to the oil output restrictions. He said that there will be a test period for the output limits from March till June, when oil producers will have to figure out “whether the mechanism works or not.”

Ñapping oil production could be even more effective than a freeze but it is difficult to implement it because the global market structure has changed dramatically since the start of oil price fall in summer 2014, and it is unclear from which historical level to cut the production, he said.

From the fundamental point of view, oil prices cannot exceed U.S. $50–60 per barrel because if prices reach this threshold, investments in upstream projects will grow and the output will increase again, Novak said.

If no oil output agreements are made between countries, oil prices can remain low in 2017, he said.

Novak separately said that he plans to visit Iran in March and can meet with the Oil Minister Bijan Namdar Zanganeh.

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