Rus­sia not ready for more cuts

New Straits Times - - Business World -

MOSCOW/DUBAI: Rus­sia isn’t ready to sup­port a pos­si­ble ex­ten­sion of oil-sup­ply cuts into the sec­ond half of the year, even as more crude pro­duc­ers ac­knowl­edge they will prob­a­bly need to do so to achieve their goals of bal­anc­ing the mar­ket and firm­ing up prices.

Five mem­bers of the Or­gan­i­sa­tion of the Pe­tro­leum Ex­port­ing Coun­tries (Opec) have sig­nalled their sup­port for a pos­si­ble ex­ten­sion, along with non­mem­ber Oman, which joined the deal on out­put cuts that Opec and 11 other sup­pli­ers reached in De­cem­ber. Opec’s big­gest pro­ducer Saudi Ara­bia has in­di­cated it’s will­ing to ex­tend the agree­ment if global stock­piles re­main above their five-year av­er­age.

Min­is­ters from seven of the 24 coun­tries par­tic­i­pat­ing in the cuts deal met in Kuwait City on Sun­day to mon­i­tor com­pli­ance. They called on Opec to present rec­om­men­da­tions next month on whether to ex­tend the ac­cord, which took ef­fect in Jan­uary, be­yond its ini­tial six-month term.

Rus­sia needs more time to as­sess the mar­ket, in­ven­to­ries and pro­duc­tion in the United States and other non-Opec coun­tries, said Rus­sia’s En­ergy Min­is­ter Alexan­der No­vak. Opec min­is­ters are due to meet in Vi­enna on May 25.

Mean­while, Gold­man Sachs said an ex­ten­sion of the joint Opec and non-Opec oil pro­duc­tion cut is not war­ranted un­less sup­ply and de­mand fun­da­men­tals de­te­ri­o­rate.

The Opec and other ma­jor pro­duc­ers should be wary of ex­tend­ing the cuts un­less there is a weak­en­ing of global oil de­mand or out­put from Libya or Nige­ria in­creases, said the bank in a note from an­a­lysts led by Damien Cour­valin. Agen­cies

AFP PIC

Rus­sia En­ergy Min­is­ter Alexan­der No­vak says the coun­try needs more time to as­sess the mar­ket, in­ven­to­ries and pro­duc­tion in the United States and other non-Opec coun­tries.

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