Russia’s 100% compliance with OPEC + production cut quotas, according to Alexander Novak, who spoke to Rossiya-24 television on Wednesday, Russian news agency Tass reported.
“We are at a high level. In July, we completed 97% of our level. This is a high figure for us. We reached 100% in August. As of today, we are fulfilling 100% of the commitments we made in August, “said Novak.
Novak also claimed that the oil market is close to balancing itself. Meanwhile, Saudi Arabia’s Energy Minister Prince Abdulaziz said global oil demand would recover by the end of the year.
According to Novak, OPEC + has “practically achieved the results” that it decided to achieve in balancing the market, with oil demand recovering to 90% from the pre-covid-19 level.
The balancing was, in part, attributed to supply being one million tons per day lower than demand, Novak said.
While Novak’s words were positive for the market, he went on to say that OPEC + could relax the cuts sooner than planned as things start to look better – especially if there does not appear to be a second wave of coronavirus.
“We will have every opportunity to make decisions, namely if the market goes too far, we will have the opportunity to reduce quotas faster,” Novak added.
Even though the market certainly looks for a quicker re-equilibrium as an advantageous scenario, it may very well take a look at Novak’s comments about easing the group’s production growth rather than expected or bearish.
Oil prices have remained as such over the past month, despite the stellar performance of OPEC +, as demand for oil has not yet returned to pre-covide 19 levels. Without repeating the demand that remains stiff due to the coronavirus, the market will continue to face any OPEC + pullback with a healthy dose of skepticism.
Julianne Geiger for Oilprice.com
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