Russia Sees No Need to Cut Oil Supply With Prices to Stabilize By Jake Rudnitsky and Mohammed Aly Sergie - 17 ธ.ค. 2557 06:47:58 Russia will keep its crude oil output steady next year and plunging prices will stabilize, Energy Minister Alexander Novak said, reiterating comments made almost three weeks ago that nation won’t adjust supply to halt a rout. The world’s largest crude producer’s output will be similar to this year’s 10.6 million barrels a day, Novak said at a conference yesterday in Doha, the Qatari capital. Brent, the global benchmark, fell almost 50 percent since the end of 2013, contributing to a currency crisis in Russia, which relies on energy for half its budget. By keeping oil output unchanged, Russia is mirroring a strategy by OPEC, which said Nov. 27 it won’t curb production to tackle a global surplus. The government planned to hold a meeting yesterday to discuss the nation’s deteriorating financial situation. Sanctions imposed by the U.S. and European Union over the conflict in Ukraine spurred the worst capital outflows in six years as the economy nears recession. “The price will stabilize itself,” Novak told reporters at the meeting of the Gas Exporting Countries Forum. “Some investment projects by oil companiesmay be reconsidered, but so far they have not adjusted anything.” The ruble sank as much as 19 percent to 80.10 yesterday, before recovering in Moscow. The drop was the biggest since 1998, when Russia defaulted on local debt. Driller Cuts Brent crude fell as much 4.2 percent to its lowest since May 2009 on the ICE Futures Europe exchange by 3:34 p.m. in London yesterday. Novak said Nov. 28 the price will recover in the medium term. Russian output will remain flat at 525 million to 526 million metric tons a year, he said. Novak met with counterparts from Mexico and OPEC members Venezuela and Saudi Arabia on Nov. 25, where the four nations failed to reach a deal to cut output. They said instead that they would jointly monitor prices. Output could fall by 1 to 2 percent next year at current price levels as producers reduce drilling, Alexei Kokin, an oil and gas analyst at UralSib Financial Corp., said. “The government will pressure companies to keep production levels up,” Kokin said. “But even that won’t be enough to keep up drilling activity at $60 a barrel.”
Posted on: Wed, 17 Dec 2014 10:10:49 +0000
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