Ministry of Energy informed about Russia's readiness to reduce oil production by 14%
Russia is ready to reduce oil production and expects that countries that produce a total of 70 million barrels per day will join the deal. In addition to OPEC and the Russian Federation, these are the USA, Brazil, Norway, Canada, Mexico and others.
In this case, Moscow will reduce production by 14% from the level of the first quarter, RBC reports , citing its source, are close to the Ministry of Energy.
- The country is ready to cut production in proportion to its share in total production, and taking into account a joint decrease of 10 million barrels. per day, says the source.
The department confirmed this.
Today, April 9, negotiations are expected on a new joint reduction in oil production, in which both OPEC + countries and other oil-producing states will take part.
Recall that the largest OPEC member - Saudi Arabia - demanded that Russia reduce production by 1.5 million barrels per day, and these volumes the Saudis proposed to count from the April production. Note that in April, Middle Eastern oil companies have already increased production, while Russia has not.
The Ministry of Energy expects the United States, which became the leader in oil production last year, to join the deal. Now the country produces about 13 million barrels per day. According to the source of RBC, Washington will also reduce production in proportion to its share in total production of 70 million barrels. daily. US President Donald Trump has repeatedly stated that he hopes for a successful conclusion of negotiations between Moscow and Riyadh after the OPEC + deal was failed. Last week, Russian President Vladimir Putin made a statement that Moscow was ready to cut production, but only with OPEC + and the United States. Note that financial analyst Pavel Spider predicted a scenario in which the United States would bury Russian oil exports in the near future.
At the same time, Texas shale workers have already announced their desire to reduce production by at least 4 million barrels. per day for three months.
- I do not participate in tomorrow's OPEC + conference call, but if I did, I would say that it is necessary to reduce production by at least 20 million barrels, and the United States will reduce production by at least 4 million barrels. in the next three months organically, ”wrote Ryan Sitton, head of the Texas state regulator, on Twitter.
He had previously expressed concerns and worries that the storage facilities were overflowing, and if they were full within three months, the world would need to reduce production by at least 30 million barrels daily.
Iranian oil minister Bijan Namdar Zangane doubts the success of the talks on April 9. He sent a letter to the head of the OPEC conference, the Minister of Oil of Algeria Mohammed Arkab, in which he said that due to the positions of the countries of the organization that had not agreed on the terms of the deal, negotiations could be failed. Before that, the OPEC secretariat sent countries market development scenarios for the coming months, but the document did not contain specific recommendations for reducing production volumes. Iran considers such rhetoric on the eve of major negotiations unacceptable.
Meanwhile, the US has already reported on the reduction of production of "black gold". According to the Energy Information Administration of the US Department of Energy, in the country from March 28 to April 3, production fell by 600 thousand barrels per day, writes Finanz. This is the largest decline in production in the United States since July 19 of last year - then hurricane Barry affected the operation of the wells. In 2021, it is expected to decrease by another 700 thousand barrels per day - to 11.03 million barrels.
A spokesman for Russian President Dmitry Peskov said that a natural decline in US oil production cannot be counted as a reduction to stabilize markets.
Note that the Moscow Exchange recorded an abnormal growth of long positions in contracts for Brent crude oil. This happened on April 3, a day later after Trump announced an agreement with Riyadh and Moscow. The buyer remained “in the shadow” - all that is known is that a mysterious trader, an individual (or a narrow group of individuals), bought more than a million futures for the North Sea variety, betting on the growth of quotations in the amount of 21 billion rubles. and depositing about 9 billion rubles as guarantee security. The purchase began last Friday - then the reference oil was trading at $ 32 per barrel. During the day, the volume of futures held by individuals rose by 812,610 contracts with a total value of 20.5 billion rubles.
It is worth noting that while Brent was rising in price, Russian raw materials continued to lose ground. The price of the Far Eastern brand Sokol, used mainly for aviation fuel, in the Asian market has fallen below $ 12 per barrel.