Russia ‘optimistic’ over OPEC output deal

Doha : Russia’s energy minister said yesterday he was “quite optimistic” the OPEC oil cartel will reach an agreement later this month on a planned output cut to shore up prices.

Alexander Novak was speaking after informal talks in Doha with some but not all of his OPEC counterparts ahead of the cartel’s meeting in Vienna on November 30.

The cartel’s 14 members have been at odds over the details of the production cut agreed in Algiers in September, which is supposed to lead to a wider agreement with non-OPEC producers including Russia.

Iran has refused to join in until it has restored its market share following the lifting of international sanctions in January.

Iraq has asked for an exemption, saying it needs the income to fund its war against the Islamic State jihadist group.

Asked whether he thought Iraq would agree to a freeze or cut at the Vienna meeting, Novak said: “I would say that I am quite optimistic at this point.

“Today’s discussions... do instil optimism in me.

“And I believe that the consultations of technical experts, which are going to be held soon, and other consultations ahead of the 30th November meeting... would result in an agreement.”

He also told reporters that Russia was willing to limit production to “certain levels”.

“We believe that demand will continue to grow. 

“Even today we have discussed numbers that demand will grow by 1.1, 1.2 million bpd (barrels per day) next year.

“If we jointly with OPEC can stabilise production and not add to supply then, yes, we believe this will be a very significant step of rebalancing the market.”

Saudi Oil Minister Khalid Al-Falih also attended Friday’s meeting but made no comment as he left and instead gave a thumbs-up sign to reporters.

OPEC ministers agreed in Algiers to reduce production to 32.5-33 million bpd from the 33.47 million pumped in August, the first cut in eight years.

Falih told the Al-Arabiya news channel in an interview aired on Thursday that he was “still optimistic that the consensus reached in Algiers to put a ceiling to production will be implemented by adopting ceilings for countries”.

Algeria’s energy minister Noureddine Bouterfa said discussions on Friday had been “good” and that “maybe” 32.5 million bdp would be the production target spoken about in Vienna.

Iraq and Iran have been asked to freeze their output levels.