Russian energy minister believes in acute need to rebalance oil market
Russian Energy Minister Alexander Novak warned Monday there was an “acute need” to rebalance the oil market and help ease price volatility, after talks with the OPEC oil cartel in Vienna.
“Probably by winter we will see considerable overkill of supply over demand. Therefore there is an acute and urgent need to speed up the rebalancing,” Novak told reporters at the Vienna headquarters of the Organization of Petroleum Exporting Countries.
The meeting highlighted “the impact that recent price volatility and the high level of stocks have had on the industry”, the two parties said in a statement.
“In addition, deliberations considered scenarios depicting the effects that climate change mitigation policies could have on oil and energy demand, and on investments in the industry,” the statement read.
OPEC and non-member Russia have held regular meetings to tighten cooperation to bolster low oil prices.
Russia, the world’s top crude producer along with Saudi Arabia, has been hit hard by the plunging market over the past two years.
Prices are currently hovering at around US$50 per barrel after hitting a 10-year low of less than $30 in January, down from a peak of more than $100 in mid-2014.
Last month, OPEC members agreed a preliminary deal to cut production for the first time in eight years, sending crude prices surging.
The cartel hopes to hammer out details of the accord ahead of its bi-annual summit in late November.
It has invited Russia and other key non-members for a technical meeting in Vienna on October 28-29.
Prior to his Vienna visit, Novak attended a Gulf ministerial meeting in Riyadh Sunday.
“The current down cycle is nearing an end... We are optimistic that oil prices will continue to improve in the future,” Saudi Oil Minister Khalid al-Falih said after the meeting.