OPEC and its allies extends output cuts into April| Oil Price Surge | Crude Oil | Latest World News
OPEC + since May weaken the restrictions on the extraction of Nefteimir, work, Kahayodynako on the eve of the OPEC meeting + Minister of Energy Saudi Arabia Prince Abdel Aziz Ben Salman held telephone conversations with the American counterpart Jennifer Granhalm, while, according to Saudi Minister, the topic of the oil market was not affected. On the same day, according to the Kremlin, a conversation between the President of the Russian Federation Vladimir Putin and the Crown Prince of Saudi Arabia Mohammant Ben Salman – the leaders of the two largest oil powers, according to the report, discussed renewable energy. According to Platts, it was Abdel Aziz Ben Salman at a meeting of OPEC + made an unexpected proposal to increase production at the moment when the hard version of Algeria was discussed with the extension of current quotas for another two months.
A new approach of OPEC + means that in the next three months more than 2 million b / s will return to the market, since in addition to the growth of OPEC quotas + Saudi Arabia will gradually turn its voluntary reduction.
So, it will additionally increase production on:
- 250 thousand. Used in May,
- 300 thousand. Used – in June,
- 400 thousand. Used – in July,
said Abdel Aziz Ben Salman. He noted that the growth of production will be largely offset by a seasonal increase in the consumption of petroleum products in Saudi Arabia, the Kingdom expects the export of oil will not grow sharply. Internal oil consumption in Saudi Arabia traditionally grows in the summer due to an increase in power consumption for air conditioning.
Russia and Kazakhstan, which, unlike other OPEC countries, got the opportunity to increase production in April to 130 thousand. b / s and 20 thousand. Used, respectively, in the next three months will increase the extraction of more than others. According to Vice Prime Minister Alexander Novak, according to a new agreement, Russia was able to additionally increase production by 114 thousand. Used Casual for May-July.
Despite the fact that the accepted OPEC + the decision seemed to be a contrary to the former rhetoric of Saudi Arabia and looks like a risky on the background of a potential new wave of coronavirus, the cost of oil in the meeting rose.
July futures on Brent on ICE went up by almost 3.2%, to $ 64.7 per barrel. However, Abdel Aziz Ben Salman left the place of uncertainty, emphasizing at a press conference that OPEC countries + can change the approach in the event of market weakness. The next ministerial meeting will be held on April 28, that is, even before new quotas come into force.
Yuri Bsyukov about the absence of OPEC countries + space for maneuver
Russian Deputy Prime Minister Alexander Novak explained OPEC’s decision + the fact that the volume of oil reserves in storage facilities are close to target levels, and the excess of the level of commercial stocks over average decreased four times from July 2020, up to 50 million barrels. “We believe that we believe that in the next two or three months, the remains should come to a normal level, to the normal correspondence of the five-year-old meaning,” Mr. Novak assured on the air “Russia 24”.
Decision of OPEC + will allow Russia in May-June to extradite 1.4 million tons of oil, notes Daria Kozlov from Vygon Consulting.
In her opinion, the increase in production is important to ensure the domestic market and loading the references before the sowing and season of vacations. Therefore, Russian companies are interested in additional volumes, especially considering the expected change in the damping parameters, and therefore increase the attractiveness of fuel supplies to the domestic market. The final level of oil production in Russia for 2021 will depend on further decisions of OPEC +, the expert notes, and Russian companies need more long-term signals in terms of production recovery to the pre-crisis level. According to her, if we assume that after July OPEC + will be systematically raised production for 500 thousand. B / C per month (this is an indicated OPEC + monthly maximum), then on average mining in the Russian Federation in 2021 should be 10.5 million b / s, which is 7% below the pre-crisis 2019.