RUSSIA SEES BALANCE
The global oil market could return to a balance between supply and demand by the end of next year, as long as producers do not raise output from current levels, Russia said on Tuesday.
Global oil prices have fallen below $40 per barrel for the first time since late 2008 after the Organization of the Petroleum Exporting Countries (OPEC) failed to agree on a production ceiling earlier this month.
Russia is rivalling Saudi Arabia as the world's top oil producer and has consistently refused to cut production or cooperate with OPEC, effectively adding to the global oversupply by pumping crude at post-Soviet era highs.
"First of all, our policy calls for maintaining production at 525-530 million tonnes (a year), according to our energy strategy," Novak told Rossiya-1 TV station, giving output figures equivalent to 10.5-10.6 million barrels per day (bpd).
In November, Russia pumped oil at a post-Soviet high of 10.78 million bpd and declined to send a delegation to the OPEC meeting on Dec. 4.
"We think that if all countries now working in the market have a policy of not increasing production but maintaining volumes, then demand and supply may already be balanced by the end of 2016," Novak said.
Russian officials have said in the past that low oil prices should squeeze out high-cost production such as U.S. shale oil, effectively reducing the level of global oversupply.
The Russian central bank is preparing a risk scenario with oil prices at $35 per barrel for the next three years. Under this scenario the economy would shrink by 2-3 percent in 2016.
Some banks, such as Goldman Sachs, predict oil prices could fall as low as $20 per barrel as the world produces more oil than it consumes and runs out of room to store the excess.
OPEC Secretary-General Abdullah al-Badri said on Tuesday that crude oil prices will not continue at multi-year lows and could swing upwards in as little as a year.
Novak, who repeated on Tuesday that Russia cannot manually regulate production due to specific weather conditions, said he saw global oil prices at about $50 per barrel in 2016.
|November, 17, 19:55:00|
|November, 17, 19:50:00|
|November, 17, 19:45:00|
|November, 17, 19:40:00|
|November, 17, 19:35:00|
|November, 17, 19:30:00|
REUTERS - Brent crude futures LCOc1 were down 72 cents at $61.49 per barrel at 1020 GMT, having fallen by 1.5 percent on Tuesday, its largest one-day drop in a month. U.S. West Texas Intermediate (WTI) crude CLc1 was at $55.12 per barrel, down 58 cents.
BLOOMBERG - Prices dropped during the session as the International Energy Agency said the recent recovery in oil prices, coupled with milder-than-normal winter weather, is slowing demand growth. The worsening outlook for consumption dampened some of the enthusiasm that OPEC and its allies will extend supply curbs.
Global energy needs rise more slowly than in the past but still expand by 30% between today and 2040. This is the equivalent of adding another China and India to today’s global demand.
Product exports have grown significantly over the past several years and are expected to continue to grow as Russian refineries add capacity to produce more high-quality products.