Friday, 19th April, 2024
Friday, 19th April, 2024

Russia plans to back another OPEC + production hike

Russia plans to support a further gradual increase in OPEC + production at its next meeting in January, as crude prices remain within an optimal range.

“To restore our output, that we’ve reduced a lot, the price range of $45 to $55 a barrel is the most optimal,” Deputy Prime Minister Alexander Novak told reporters in Moscow. “Otherwise we’ll never restore production, others will restore it.”

The average cost of Brent crude was about $50 a barrel when the Organization of Petroleum Exporting Countries and its partners adopted a new plan to gradually increase output. The group, led by Russia and Saudi Arabia, will increase daily crude production by a monthly increment of 500,000 barrels next year, instead of the previous plan of adding about 2 million barrels from next January.

As the COVID-19 epidemic continues, the group will respond to uncertain demands, and OPEC + ministers will meet every month to discuss the size of each increase. The next meeting, scheduled for January 4, will determine how much supply should be added to the market in February.

“If the situation is normal, stable, we will support this increase,” Novak said when asked if Russia wants an increase of another 500,000 barrels a day in February. “We must reach a level that has not been able to pull the market very slowly since January 1,” he said.

This change means that OPEC + is blocking about 6.7 million barrels per day, compared to the cut of about 7.7 million barrels per day from the market in February.

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