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OPEC sees larger Russia oil supply cuts; no final figure
Expectations are rising among Organization of Petroleum Exporting Countries members that Russia will offer deeper oil-export cuts to help OPEC firm up crude prices, but just how far the Russians are willing to cut remains unclear, a Gulf OPEC source said on Tuesday.
Expectations are rising among Organization of Petroleum
Exporting Countries members that Russia will offer deeper oil-export cuts to
help OPEC firm up crude prices, but just how far the Russians are willing to cut
remains unclear, a Gulf OPEC source said on Tuesday.
"I expect that they will come with something," the source said. "I don't know how much." The comment follows statements Monday by OPEC President and Algerian Oil Minister Chakib Khelil and OPEC Secretary General Ali Rodriguez suggesting that a deal on coordinated output cuts with Russia was imminent. OPEC agreed to cut its output by 1.5 million barrels a day from Jan. 1, provided non-OPEC producers reduce supplies by a combined 500,000 b/d. Mexico and Norway have agreed to cut between 100,000 and 200,000 b/d, but Russia has offered only a token cut of 50,000 b/d for the current quarter. Angola said Tuesday it will not reduce output next year.
Representatives from Russia's leading oil companies are scheduled to meet with Prime Minister Mikhail Kasyanov early Wednesday to discuss additional measures to stabilize the oil price, a spokesman from oil company Yukos (R.YUK) said. A decision on supply levels beyond Jan. 1 is expected by Monday. With average output this year of 7 million b/d, Russia stands as the world's second largest crude producer. OPEC members were expecting supply cuts from Russia in the neighborhood of 200,000-300,000 b/d.
Russian oil exports typically fall by that much during the winter as domestic demand surges. Analysts say that whatever cuts Moscow agrees to in its negotiations with OPEC will be short-lived, and are unlikely to reduce supplies further than what would be seen during a normal winter.
"Russia will come up with statements to please OPEC countries," said Vladislav Metnev, an energy analyst with Renaissance Capital in Moscow. "They will agree to deeper production cuts. We still think that this production cut won't be long lived, and in the second half of 2002, oil companies will start increasing the production once again." Oil prices surged Monday on a combination of bullish comments from OPEC officials and Israel's attack on Palestinian Authority targets in Gaza. Benchmark Brent crude futures gained 57 cents Monday to close at $19.71 a barrel, and were trading 24 cents higher early Tuesday at $19.95/bbl. The OPEC crude basket averaged $18.12/bbl Monday compared with $17.74/bbl Friday.
The Gulf source said prices are up on market expectations OPEC will cut output in concert with non-OPEC producers from Jan. 1, and the approach of winter. Bureau Report
"I expect that they will come with something," the source said. "I don't know how much." The comment follows statements Monday by OPEC President and Algerian Oil Minister Chakib Khelil and OPEC Secretary General Ali Rodriguez suggesting that a deal on coordinated output cuts with Russia was imminent. OPEC agreed to cut its output by 1.5 million barrels a day from Jan. 1, provided non-OPEC producers reduce supplies by a combined 500,000 b/d. Mexico and Norway have agreed to cut between 100,000 and 200,000 b/d, but Russia has offered only a token cut of 50,000 b/d for the current quarter. Angola said Tuesday it will not reduce output next year.
Representatives from Russia's leading oil companies are scheduled to meet with Prime Minister Mikhail Kasyanov early Wednesday to discuss additional measures to stabilize the oil price, a spokesman from oil company Yukos (R.YUK) said. A decision on supply levels beyond Jan. 1 is expected by Monday. With average output this year of 7 million b/d, Russia stands as the world's second largest crude producer. OPEC members were expecting supply cuts from Russia in the neighborhood of 200,000-300,000 b/d.
Russian oil exports typically fall by that much during the winter as domestic demand surges. Analysts say that whatever cuts Moscow agrees to in its negotiations with OPEC will be short-lived, and are unlikely to reduce supplies further than what would be seen during a normal winter.
"Russia will come up with statements to please OPEC countries," said Vladislav Metnev, an energy analyst with Renaissance Capital in Moscow. "They will agree to deeper production cuts. We still think that this production cut won't be long lived, and in the second half of 2002, oil companies will start increasing the production once again." Oil prices surged Monday on a combination of bullish comments from OPEC officials and Israel's attack on Palestinian Authority targets in Gaza. Benchmark Brent crude futures gained 57 cents Monday to close at $19.71 a barrel, and were trading 24 cents higher early Tuesday at $19.95/bbl. The OPEC crude basket averaged $18.12/bbl Monday compared with $17.74/bbl Friday.
The Gulf source said prices are up on market expectations OPEC will cut output in concert with non-OPEC producers from Jan. 1, and the approach of winter. Bureau Report