Rus­sian oil groups agree to freeze out­put, says Putin

The Pak Banker - - MARKETS/SPORTS -

Rus­sian oil groups have agreed to freeze pro­duc­tion lev­els as pro­posed last month by Moscow and Saudi Ara­bia to curb a near-record slump in prices, Pres­i­dent Vladimir Putin said Tues­day.

Open­ing a meet­ing with oil group chiefs, he said En­ergy Min­is­ter Alexan­der No­vak had led dis­cus­sions on forg­ing an agree­ment be­tween pro­ducer coun­tries to main­tain their out­put.

"As the min­is­ter re­ported to me, you all agree with this pro­posal," Putin told them in com­ments re­leased by the Krem­lin, adding: "There are even more rad­i­cal pro­pos­als but you don't all agree."

He said the idea was to "fix Rus­sia's 2016 pro­duc­tion level at that of Jan­uary," which was a post-Soviet record of 10.8 mil­lion bar­rels per day on av­er­age.

Saudi Ara­bia and Rus­sia -two of the world's big­gest oil pro­duc­ers -- pro­posed af­ter a Fe­bru­ary 16 meet­ing with Qatar and Venezuela that all pro­ducer coun­tries freeze their out­put at Jan­uary lev­els to sup­port prices, pro­vided that other ma­jor pro­duc­ers fol­lowed suit.

The news sparked hopes the mar­ket would sta­bilise af­ter sink­ing to near 13-year lows last week on the stub­born sup­ply glut -- but dis­ap­pointed those look­ing for an out­put cut.

De­spite Iran's re­fusal to play ball, oil prices have sig­nif­i­cantly re­cov­ered since, sup­ported by the an­nounce­ment of a new meet­ing in mid-March be­tween Rus­sia and OPEC mem­bers Qatar, Venezuela and Saudi Ara­bia.

Af­ter Tues­day's meet­ing led by Putin, No­vak con­firmed that Rus­sia's oil groups had agreed to "sup­port" a freeze which "should re­duce volatil­ity" in mar­kets.

Nev­er­the­less, "our com­pa­nies are not propos­ing a cut in pro­duc­tion, even less so be­cause that is im­pos­si­ble in the cur­rent geopo­lit­i­cal con­di­tions," he said, cited by the In­ter­fax news agency.

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