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Energy Minister Novak: Russia Cuts More Oil Output In February

Minister Novak

Russia’s oil production in February will be lower than the January output, with Moscow cutting more than the 117,000 bpd cut it made last month, Russia’s Energy Minister Alexander Novak said on the sidelines of an event in Sochi on Monday.

It’s still early to talk of specific figures for February, but the cut would be more than the 117,000 bpd reduction in January, Russian news agency RIA Novosti quoted Novak as saying to reporters, answering a question about how much oil Russia is cutting this month.

The Russian minister also reiterated that his country would be sticking to the agreement between OPEC and non-OPEC producers to curtail output in order to rebalance the market. Moscow will be trying to speed up the gradual cutting of the 300,000 bpd it had promised by the end of the first half, Novak said, adding that anything is possible, when asked whether the 300,000-bpd-cut could be reached in early April. The timing will depend on the capabilities of the companies, the minister said, as quoted by RIA Novosti.

OPEC and the 11 non-OPEC nations—led by Russia—that have joined the deal achieved a combined 86-percent compliance rate in January, OPEC said last week, hailing “solid progress towards full conformity”. Related: Wind Energy Boom Hits The U.S.

Non-OPEC-only compliance has been estimated to vary between 48 percent and 66 percent, with Russia playing a major role in the low (as compared to OPEC’s surprisingly high) compliance, due to its pledge to ‘gradually’ cut 300,000 bpd, more than half the 558,000 bpd total non-OPEC reduction.

As for the recurring question about whether the supply-cut agreement needs to be extended beyond June, Novak said today that an extension is possible in case the market still imbalanced, adding that it would not depend on the price of oil.

Earlier this month, Novak said that the decision on whether to extend the agreement with OPEC will be made in April or May.

By Tsvetana Paraskova for Oilprice.com

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