As the price of crude oil sinks in spite of OPEC and Russia once again trying to talk up the market, Russia is open to extending production cuts with OPEC and will discuss at their meeting on May 24th. OPEC has pledged 1.8 million barrels a day will be cut from production. Russia has agreed to 300,000 which will be phased in. Russian Energy Minister Alexander Novak discussed the issue on Friday.
“The OPEC Secretariat will send the information to all the countries that are taking part in the agreement and we will discuss the issue during a ministerial meeting on May 24,” he said, reported Reuters.
As economic growth lags around the world, especially in China, oil stocks are still very high despite production cuts. WTI just broke the psychological $50 barrier to the downside with Brent not far behind. Russia needs high oil price to buttress its low-growth economy and to fill holes in the federal budget.
“There are no firm decisions on that. Each country is looking into the matter by itself so it can make its proposals and evaluations,” Novak declared on a visit to Tokyo.
“The situation has gradually been improving since the beginning of March,” Novak said. “The oil surplus has been reduced. The situation is getting more and more stable and there’s less volatility on the market.”