Russia committed to OPEC+ oil cuts: UAE energy minister

UAE’s Suhail bin Mohammed Al-Mazroui also said that compliance with the cuts by both Russia and OPEC’s second largest producer Iraq has increased in March. (Reuters)
Updated 10 April 2019
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Russia committed to OPEC+ oil cuts: UAE energy minister

  • ‘Russia will not increase its output unless in coordination with the rest of OPEC and OPEC+ countries’
  • Russia agreed to cut its production by 228,000 bpd but has struggled to comply with the pact

ABU DHABI: United Arab Emirates’ energy minister said on Wednesday that Russia was committed to its oil supply cut agreement with OPEC and would not raise its output unless in coordination with the exporting group.
UAE’s Suhail bin Mohammed Al-Mazroui also said that compliance with the cuts by both Russia and OPEC’s second largest producer Iraq has increased in March, adding that he expected the oil market to achieve balance by the end of 2019.
“Russia will not increase its output unless in coordination with the rest of OPEC and OPEC+ countries,” Mazroui said.
“I believe in the wisdom of Russia, and I believe that Russia has benefited from this agreement... I don’t see any reason for Russia not to continue with us.”
Mazroui’s comments came a day after Russian President Vladimir Putin said that Russia and OPEC should discuss the future of their oil output-cutting deal later this year, adding that current oil prices suited Moscow.
Brent futures LCOc1 were at $70.93 per barrel at 1100 GMT, up 32 cents, or 0.44 percent, from their last close on Wednesday as OPEC cuts and US sanctions on Iran and Venezuela continued to tighten supply.
The Organization of the Petroleum Exporting Countries and other oil producers led by Russia agreed to reduce their combined output by 1.2 million barrels per day (bpd) from Jan. 1 this year for six months in an attempt to balance the market.
Russia agreed to cut its production by 228,000 bpd but has struggled to comply with the pact.
On Monday, one of the key Russian officials to foster the pact with OPEC, Kirill Dmitriev, signaled that Russia wanted to raise oil output when it meets with OPEC in June because of improving market conditions and falling stockpiles.
But Putin, the ultimate decision-maker in Russia, seemingly softened that stance, saying it was too early to judge whether the deal should be extended.
Speaking at a conference in Abu Dhabi, Mazroui also said the UAE can raise its crude oil production up to 3.5 million bpd if needed.
The UAE currently produces around 3 million bpd under the OPEC+ reduction agreement.


US-China trade deal hopes grow as oil prices decline

Updated 19 June 2019
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US-China trade deal hopes grow as oil prices decline

  • Data suggested a smaller-than-expected fall in American crude inventories
  • Preparations underway for Donald Trump to meet Xi Jinping next week at the G20 summit in Osaka

LONDON: Oil prices declined on Wednesday as data suggested a smaller-than-expected fall in American crude inventories, as hopes for a US-China trade deal continue to grow.
Brent crude futures were down 51 cents at $61.72 a barrel.
US West Texas Intermediate crude fell 25 cents to $53.65 a barrel. On Tuesday, it had recorded its biggest daily rise since early January.
After weeks of swelling, US crude stocks fell by 812,000 barrels last week to 482 million, the American Petroleum Institute said on Tuesday, a smaller fall than the 1.1-million-barrel drop analysts had expected.
Official estimates on US crude stockpiles from the US government’s Energy Information Administration are due during afternoon trading.
US President Donald Trump offered some support, saying preparations were underway for him to meet Chinese President Xi Jinping next week at the G20 summit in Osaka, Japan, amid hopes a trade deal could be thrashed out between the two powers. Trump has repeatedly threatened China with tariffs since winning office in 2016.
European Central Bank President Mario Draghi also offered a boost, saying on Tuesday that he would ease policy again if inflation failed to accelerate.
Tensions remain high in the Middle East after last week’s tanker attacks. Fears of a confrontation between Iran and the US have mounted, with Washington blaming Tehran, which has denied any role.
Trump said he was prepared to take military action to stop Iran having a nuclear bomb but left open whether he would approve the use of force to protect Gulf oil supplies.
On Wednesday, oil markets shrugged off a rocket attack on a site in southern Iraq used by foreign oil companies.
“It is interesting to note that the crude oil futures market could not rally on hawks planting bombs in the Strait of Hormuz but could rally on doves planting quantitative easing,” Petromatrix’s Olivier Jakob said in a note.
“This is an oil market that doesn’t know how to react when an oil tanker blows up but knows how to react when the head of a central bank makes some noise.”
Members of the Organization of the Petroleum Exporting Countries have agreed to meet on July 1, followed by a meeting with non-OPEC allies on July 2, after weeks of wrangling over dates.
OPEC and its allies will discuss whether to extend a deal on cutting 1.2 million barrels per day of production that runs out this month.