End oil output caps at $60, Russian says

Oil producers should not extend supply cuts beyond their expiration at the end of March if prices rise to $60 a barrel, said the chief executive officer of Russia’s secondlargest oil company.

Russia and OPEC should wind down their deal from April if prices reach that level, said Vagit Alekperov, the billionaire CEO of Lukoil PJSC. They should not allow the market to move into a supply deficit, he said.

“If the goal is reached and the price is $60, then I think we should smoothly exit the agreement,” Alekperov said Tuesday in a Bloomberg television interview in London. “If we achieve that goal of $55 to $60, then extending the cuts would be inappropriate.”

OPEC and its allies have been cutting production by as much as 1.8 million barrels a day since January in an effort to shrink inventories and drive global prices higher. They have already discussed prolonging the accord well into 2018 as oil supplies remain stubbornly high. Russian President Vladimir Putin said last week that he was open to extending it until the end of next year, although it was still too early to make a decision.

Alekperov, who has run Lukoil since it was founded as the Soviet Union broke up and is also the largest shareholder, said the cartel’s actions have helped to stabilize the market. “A price of $55-$60 suits producers and consumers,” he said.