Russia oil Tsar to meet with Opec
AL NAIMI BRUSHES OFF QUESTIONS ON OIL PRICE, SUPPLY
Russia’s most powerful oil official, Igor Sechin, was due in Vienna late yesterday for talks with Opec members as the group’s leader Saudi Arabia kept the market guessing about its response to flagging oil prices.
Sechin, the head of state oil company Rosneft and a close ally of Russian President Vladimir Putin, is expected to meet Opec officials amid hints from Moscow that Russia could cut output or exports if the producer group does the same.
Oil prices have fallen 30 per cent since June to around $ 80 per barrel as a global oil glut has built up on the back of a US shale boom and lower global demand because of slower economic growth in China and Europe.
Current prices are far below what most Opec members and rival producers such as Russia need to balance their budgets.
Diplomatic and market sources say Saudi officials told briefings in recent months that the kingdom, with its large currency reserves, was prepared to withstand oil prices as low as $ 70-$ 80 per barrel for up to a year.
When Saudi Oil Minister Ali Al Naimi spoke earlier this month after weeks of silence, he said Riyadh’s desire for stable markets had not changed but gave no clue about his
No oversupply worry
In Vienna on Monday and yesterday, Naimi brushed off reporters’ questions about oil prices and surplus supplies. “This is not the first time the market is oversupplied,” he said.
The fact that Naimi arrived three days before tomorrow’s meeting indicates he is gearing up for long talks with fellow ministers and possibly Sechin, who has been targeted by US sanctions over Russia’s actions in Ukraine.
Russia’s Kommersant newspaper cited sources on Monday as saying Russia might suggest cutting its oil production by around 300,000 bpd from next year. potential response. “Although the objectives of the group are unclear today, what is apparent is that investors and companies are being shocked out of the $ 100 per barrel oil comfort range of the last four years and that volatility looks set to remain a feature in 2015,” analysts from Barclays wrote.