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Russia and its OPEC partners in the production cut deal will take into account the slowing U.S. shale production growth at their December meeting to discuss the agreement, Russia’s Deputy Energy Minister Pavel Sorokin told news agency TASS in an interview published on Monday.
However, the Russian official was quick to add that it was too early to talk about a potential deepening of the oil production cuts because the production cut mechanism is not limitless.
“The OPEC+ mechanism has shown that it is efficient, but it cannot be efficient forever,” Sorokin told TASS, noting that Russia is monitoring the slowing growth in U.S. shale production.
There has been a significant slowdown in U.S. production growth over the past three-four months, Sorokin said, noting that drilling efficiency has basically stalled over the past two years.
Russia and its partners need to monitor the U.S. production trends at the current oil prices until December, the Russian official told TASS.
The OPEC+ partners are meeting on December 5 and 6 to discuss the production cut pact, amid mounting evidence that deeper cuts may be needed to rebalance the oil market amid faltering economic and oil demand growth.
OPEC and its non-OPEC partners are currently not discussing changing the terms of their agreement, Russia’s Energy Minister Alexander Novak said earlier this month.
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While Russia and Saudi Arabia reiterate their cooperation on the oil market, those leaders of the OPEC+ pact are not yet publicly expressing views that the coalition may need to deepen the cuts that currently expire in March 2020, in view of flagging global oil demand and weakening economies.
OPEC Secretary General Mohammad Barkindo is not ruling out the possibility of a deeper cut that could be discussed and/or decided at the end of this year.
All options are on the table, including a deeper cut from OPEC and its allies in December, Barkindo said in early October.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.