Rus­sia sup­ports OPEC plan to limit oil pro­duc­tion

Jamaica Gleaner - - BUSINESS -

RUS­SIAN PRES­I­DENT Vladimir Putin said Mon­day his coun­try is ready to re­duce oil pro­duc­tion and sup­ports OPEC’s ini­tia­tive to trim pro­duc­tion as a way to sup­port oil prices.

Speak­ing at the World En­ergy Congress in Is­tan­bul, Putin crit­i­cised the sur­plus of oil and warned that if cur­rent ten­den­cies con­tinue, it will lead to lack of fi­nanc­ing, deficits and new price fluc­tu­a­tions that will hit both pro­duc­ers and con­sumers.

Say­ing that the only right de­ci­sion to main­tain the sta­bil­ity of world en­ergy re­sources is a freeze or cut in pro­duc­tion, Putin said, “Rus­sia is ready to join joint mea­sures on re­duc­ing the pro­duc­tion of oil and in­vites other oil ex­porters to do so.”

He added: “We sup­port the re­cent OPEC ini­tia­tive to fix lim­i­ta­tions on pro­duc­tion and hope that at the Novem­ber OPEC meet­ing, this idea will be trans­formed into real agree­ments giv­ing a pos­i­tive sig­nal to mar­kets and in­vestors.”

Also at the congress, Venezue­lan Pres­i­dent Ni­colás Maduro said it was nec­es­sary to find a new mech­a­nism within six months to sta­bilise mar­kets. “Petroleum pro­duc­ers, OPEC mem­bers should reach an agree­ment and should work for the sta­bil­ity of the petroleum in­dus­try,” he said.

SANC­TIONS BAD FOR SEC­TOR

Putin also crit­i­cised uni­lat­eral sanc­tions. “It is in­ad­mis­si­ble to curb the de­vel­op­ment of the en­ergy sec­tor for the sake of political am­bi­tions of cer­tain coun­tries. Such ac­tions do not con­trib­ute in any way to the sta­bil­ity of the world en­ergy sec­tor.”

Oil jumped to its high­est price in more than a year af­ter Rus­sia’s gov­ern­ment said it sup­ports ef­forts by OPEC to cut oil pro­duc­tion. In late Septem­ber the na­tions of OPEC an­nounced a pre­lim­i­nary agree­ment to trim oil pro­duc­tion, but Rus­sia, a ma­jor en­ergy pro­ducer, isn’t a mem­ber of OPEC.

Bench­mark US crude rose US$1.53, or 3.1 per cent, to US$51.35 a bar­rel in New York. That was its high­est clos­ing price since July 2015. Brent crude, used to price in­ter­na­tional oils, gained US$1.21, or 2.3 per cent, to US$53.14 a bar­rel in Lon­don.

In other en­ergy trad­ing, whole­sale gaso­lene rose two cents to US$1.50 a gal­lon. Heat­ing oil rose 3 cents to US$1.61 a gal­lon. Nat­u­ral gas gained 8 cents, or 2.6 per cent, to US$3.28 per 1,000 cu­bic feet.

Also on Mon­day, at a meet­ing in In­stan­bul, Putin and Pres­i­dent of Turkey Re­cep Tayyip Er­do­gan voiced sup­port for the con­struc­tion of a gas pipe­line from Rus­sia to Turkey, called Turk­ish Stream, a project that was sus­pended amid ten­sions be­tween the two coun­tries. The pipe­line would carry Rus­sian nat­u­ral gas to Turkey and on to Euro­pean Union coun­tries.

AP

Pres­i­dent of Venezuela Ni­colás Maduro (left) speaks to Rus­sian Pres­i­dent Vladimir Putin dur­ing their meet­ing af­ter the World En­ergy Congress in Is­tan­bul yes­ter­day.

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