Oil production ceiling may be relaxed this year

22 April 2018
With oil prices rising steadily over the past few days, oil producers may choose to ease restriction on output, Russian energy minister says

Russian Energy Minister Alexander Novak says that oil producers’ group Opec and the group of 11 non-Opec countries led by Russia may decide to relax oil production cuts as early as this year.

Novak also said that it was too early to talk about the format of cooperation between Opec and non-Opec countries beyond 2018, and that cooperation may not necessarily be about extending output quotas, once the deal on oil production cuts expires at the end of this year.

Novak made the remarks on 20 April, the same day that the Joint Ministerial Monitoring Committee overseeing the compliance of members to the deal to reduce output by 1.8 million barrels a day met in Jeddah.

Oil benchmark Brent crude has been trading above $70 a barrel in the past few days, and was close to $75 according to the latest quote.

Meanwhile, UAE Energy Minister, Suhail Mohamed al-Mazrouei, has called on more oil producers to join Opec and non-Opec producers in curbing supply.

"Opec members and non-Opec producers over-delivered on the supply cuts they promised... But we must include further countries in the pact," Al-Mazrouei told German newspaper Handelsblatt.

The UAE minister also renewed his call for an increase in investment in the industry to keep up with rising demand.

"The oil sector needs billions of US dollars in investments, not the hundreds of millions we are seeing right now," he said.

According to recent reports, Opec’s de facto leader Saudi Arabia is willing to see crude prices rise above $80 a barrel, and even soar to $100, so that Riyadh can achieve the desired $2 trillion valuation of Saudi Aramco ahead of its planned 5 per cent stock listing through an initial public offering.

US President Donald Trump has criticised Opec on Twitter for being responsible for “artificially high” prices.

“Looks like OPEC is at it again. With record amounts of Oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High! No good and will not be accepted! (sic),” he tweeted.

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