Russian Energy Minister Alexander Novak has credited last year’s deal on oil output cuts with helping set a fair price, Trend reported citing Sputnik.
"The market today looks relatively calm and stable, marked by decreasing volatility and more or less acceptable prices for both exporters and importers. We attribute this stability primarily to the deal", he said in an interview with Gazeta.ru.
The Brent benchmark traded at $65 per barrel, while the WTI was lower at $55 per barrel. Novak said prices bottomed out at $50 in December 2018 when the OPEC and several major oil producers agreed to take an extra 1.2 million barrels a day off the market.
"If the glut had continued we would have seen them [prices] sink even deeper. Let me remind you that prices hit $25-27 per barrel in January 2016. It is possible that we would have seen the market hit a new low," Novak added.
The new deal on production caps will last until this July. US President Donald Trump took to Twitter on Monday to urge OPEC to "relax and take it easy" after warning that oil prices were getting too high.
Novak also said in an interview that Russia will reach a reduction in oil output under the OPEC-non-OPEC deal by the agreed volume of 228,000 barrels per day by April.
"By 1 February, we started to reduce production somewhere about 90,000-100,000 barrels per day on October 2018. And given that in December we had output rates higher than in October, by some 50,000 barrels, then against December, the reduction has now reached almost 140,000-150,000 barrels per day. These are quite large and high rates of reduction. And I think that we will reach the parameters that were agreed upon under the agreement during March, by the end of March — the start of April", Novak said.
Last Friday, oil prices fell just below $67 per barrel after the United States hit another record in oil production by pumping 12 million barrels per day, undermining efforts of other major oil producers, including Saudi Arabia and Russia, at limiting their production to stabilize the market.