RUSSIA: NO RISE & CUT
Russia is against an increase in global crude production, rather than favouring a reduction, and remains pessimistic about the possibility of Moscow and Riyadh reaching a production coordination deal, Russia's energy minister Alexander Novak said Thursday.
"We are in favor of, not a cut, but of countries not increasing their output, so that demand, which is growing year-by-year, is covered by the oversupply that exists in the market," Novak said.
As one of the world's leading crude producers, but not an OPEC member, Russia's involvement in potential action to support prices has been the source of much speculation since prices started tumbling in the second half of 2014. But Novak reiterated Thursday that coordinated action remains unlikely.
"I am pessimistic about that, because within OPEC itself, there is not a unified agreement on the need to cut," Novak said, responding to a question on whether Russia may agree with Saudi Arabia on organized limits to production.
He added that he estimates oil prices will average $50/barrel in 2016.
OPEC members have failed to agree on coordinated action within the group.
Expectations ahead of a meeting last week had been for a rollover of current policy based on the 30 million b/d ceiling in place since January 2012.
But OPEC did not agree an overall output ceiling and did not include a ceiling figure in its official communique on results of the meeting. OPEC secretary general Abdalla el-Badri said this was because it hoped to continue negotiations with non-OPEC producers on managing supply.
Members met against a backdrop of uncertainty over the impact of significant Iranian volumes returning to the market if sanctions against Tehran are lifted.
OPEC's output was 31.695 million b/d in November, up 230,100 b/d from 31.465 million b/d the previous month, according to the latest OPEC report.
While Novak did not take part in that OPEC meeting in Vienna, Russia is expected to take part in the next expert-level meeting between OPEC and some non-OPEC producers on global oil markets on Tuesday.
Russia has been increasing its own output over the course of 2015, with production reaching 44.115 million mt, or 10.779 million b/d of crude in November, up 1.4% on the year, according to the Central Dispatching Unit, the statistical arm of Russia's energy ministry.
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