Novak for gradual withdrawal of OPEC, OPEC+ states from oil cut deal
Baku, Azerbaijan, Dec. 22
The countries of OPEC and OPEC+ should gradually withdraw from the 'Vienna Agreements', Russia's Energy Minister Alexander Novak told Kommersant newspaper.
Novak said the supply and demand is within the expectations.
"When entering the 'Vienna Agreements', we estimated daily production increase in the US by 0.3–0.35 million barrels per day (mbd) on annual average or by 0.7–0.75 mbd from December 2016 to December 2017. So far, our forecast has been quite accurate, as overall the dynamics of supply and demand meet the expectations. Joint efforts helped the market win a solid foundation for rebalancing: demand has increased by 3 mbd over two years, and will most likely add 1.4–1.5 mbd per day in 2018. This will gradually finalize rebalancing," Novak said.
Coming to withdrawal from the OPEC deal, he mentioned the consensus that requires phased withdrawal as long as demand grows to avoid reoccurrence of oversupply and market overstocking.
"We keep monitoring all the major market trends, including production of shale oil," said the minister.
He said that Russia estimates to keep up on the level of 2017, provided that the agreement remains unchanged in 2018.
"If we look at the dynamics of investments in the production, there is significant increase in the first ten months of 2018, compared to last year. So I wouldn't say there is "lost production", this amount will gradually come back, amid more stable and predictable market," Novak said.