Russia's Novak says cuts deal is working: Update
Adds ministry statement.
Moscow, 7 July (Argus) — Russia's oil minister Alexander Novak has added his voice to those of several Opec ministers, saying that there is no need to change the parameters of the output restraint deal between Opec and 10 non-Opec producers, Russia the principal one.
But he said the forthcoming meeting of the ministerial committee that monitors output cut compliance, which next gathers in Russia on 24 July, might look at additional measures.
Although oil prices have fallen since the cuts agreement was extended to the end of March next year, Novak said global stocks are falling. He said that responding to short-run price movements gives incorrect signals to the market.
His remarks follow similar comments by ministers from some Opec countries, including Saudi Arabia, Iran, Kuwait, and Iraq.
Novak's comments were followed by a ministry statement today that said "Russia at the moment sees the oil market stabilisation initiative as effective, accelerating the inventory draw process and helping stabilise the global crude market."
The monitoring committee — the JMMC — "will elaborate on any proposals in regard to upcoming or additional steps, assessing their timeliness,necessity and effectiveness." Moscow will consider any proposals that come out of the committee, of which Novak is a member, the statement said.
Brent lost some $10/bl after the late May decision to extend cuts. An upward price movement late last month halved those losses but prices have fallen again this week with front month Brent losing over $1/bl in early trading today to stand around $47/bl.