Novak upbeat on market balance

Russian energy minister Alexander Novak today gave a broadly upbeat assessment of oil-market fundamentals, as positioning begins ahead of next month's meeting of Opec and its non-Opec partners.

"If we speak about fundamentals, we do not see now any negative forecasts, the market is balanced at present," Novak said. "Now we see that prices are relatively positive — above $60/bl, which means that the situation is more or less stable."

Next month, the 24-strong group are likely to discuss the prospects for their production-restraint deal, which runs until March next year. They have agreed to scale back their collective output by around 1.2mn b/d in an effort to balance the market. Russia has been inconsistent in implementing the agreement.

As yet there is no consensus among participants in the deal as to its future. But, with OECD commercial oil stocks still close to the record levels seen during most of 2016, and renewed concerns over demand growth rates next year, there is a renewed focus on whether further action might be needed. And, as recent economic indicators suggest difficult times ahead, notably for the big consuming nations in Asia-Pacific, some participants in the deal would like the comfort of receiving a higher price for their crude.

Iran's oil minister Bijan Namdar Zanganeh this week bemoaned the rangebound nature of international crude prices, and said "there are discussions about increasing the production cuts at the upcoming meeting."

Opec's secretary-general Mohammed Barkindo said yesterday that it is "premature" to be talking about any actions to be taken at the 5 and 6 December meetings of Opec and non-Opec in Vienna, but said "the picture for 2020 is gradually looking much brighter than when we met earlier in the year".