Alexander Novak, Minister of Energy of the Russian Federation

Russia: rebalancing months away

MOSCOW, May 12, 2016 – Alexander Novak, Russian minister of energy, said on Thursday that oil markets may still be months away from rebalancing and cautioned against too much optimism over recent oil price gains.

Russia, one of the driving forces behind talks between OPEC members and non-OPEC members to freeze production at January 2016 levels, through Novak also signalled it would be ready to resume talks on capping output should the opportunity arise. Speaking to reporters, Novak noted the drop in output at present was not strong enough to significantly affect oil prices, and said a correction of the supply-demand imbalance should not be expected before the first half of 2017.

“And this is an optimistic forecast as the oversupply persists and the decline in production volumes is slower than analysts have expected,” he said.

Russia is forecast to produce 10.81 million bopd this year, up from 10.72 million bopd in 2015.

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