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Russian oil producers loosely in line with OPEC

The head of Russian oil company Lukoil said there are only proposals floating around at this point.

By Daniel J. Graeber
Russian oil producers loosely in line with OPEC
Russian oil producers warm to OPEC output deal, but energy minister says formal arrangement will have to wait. File Photo by Calin Tatu/Shutterstock

MOSCOW, Dec. 8 (UPI) -- Russian oil companies have warmed to an OPEC decision on production levels, but only in very loose terms, the Russian energy minister said.

Members of the Organization of Petroleum Exporting Countries have invited a handful of non-member states to a weekend meeting in Vienna to consider the terms of a production ceiling proposed last week. The agreement would cut out about as much oil production as OPEC expects in demand growth next year, but much of that depends on the cooperation of non-OPEC members like Russia.

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Russian Energy Minister Alexander Novak said oil companies there are supporting proposals to limit oil production.

"All the details will be announced at the meeting in Vienna on [Saturday]," he was quoted by Russian news agency Tass as saying.

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According to the economists at OPEC, Russia is on pace to average about 11 million barrels of oil production per day this year, about 1.8 percent higher than last year. If accurate, Russian production for the year would be at or near a post-Soviet record.

Higher levels of oil production from major producers like Russia, the United States and some members of OPEC helped pull crude oil prices below $30 per barrel earlier this year. Recent data show some markets are still oversupplied.

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Vagit Alekperov, the head of Russian oil company Lukoil, said the Russia commitments to the OPEC production agreement, which goes into force in January, are fluid at this point.

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"There are no decisions yet, only recommendations," he said.

The Russian energy minister in the past has expressed support for static production. Based on current production data, the cap of around 32.5 million barrels per day would have to come from cuts in output.

Before the OPEC deal was reached last week, Russian President Vladimir Putin said the country was ready to "freeze production" at current levels.

RELATED Putin sees few problems with freezing oil production

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