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    Head Office in Nigeria

    No 1A, Road 5B, Kemta Housing Estate, Idi-Aba Abeokuta, Ogun State 《《》》 Lagos Office 99, pipeline road, Fagba bus stop, ifako ijaye, Lagos State

    Request a Quote

    Looking for a quality and affordable Supplier for your next needs?

    * Please Fill Required Fields *
    img

    Call

    +234 902-377-5924

    Working Hours

    We are happy to meet you during our working hours. Please make an appointment.

    • Mondays- Friday8.00AM- 6:30PM

    OPEC+ deal would improve by including U.S. shale forecasts – Gazprom Neft

    Video / October 27, 2019

    The OPEC+ oil-production cuts deal could be improved by taking into account forecasts for global crude-demand growth and U.S. shale, Gazprom Neft PJSC Head of Strategy and Innovation Sergey Vakulenko said in an interview on Wednesday.

    “We think that the mechanism of the alliance might become more sophisticated. Currently we’re looking just at stocks and averages,” Vakulenko said. “We could look at other signals like production levels and forecasts for demand growth.”

    Vakulenko added that the group could start to assess not just the proportion of global oil-demand growth the Organization of Petroleum Exporting Countries and its allies could cater for but also the market share left for U.S. shale producers. “So to react not just to the only measurable number–stock levels–but to what actually creates that number in months and years to come,” he said.

    Preemptive Strike. While Gazprom Neft is one of Russia’s largest oil producers, and alongside other operators has meetings with the country’s energy ministry to present its own views on supply and demand, the company has no direct input into OPEC+ policy making. Instead, Russia’s Energy Ministry, gives the country’s oil producers voluntary production targets, in accordance with Russia’s commitments under the OPEC+ agreement.

    OPEC and its allies are due to meet in December to discuss whether steeper cuts to oil supply will be needed after the current agreement expires in March 2020. Brent crude has struggled to rise much above $60/bbl this year despite some of the worst supply disruptions in recent times.

    “We think that this OPEC+ mechanism is very useful for stabilizing the market, for removing volatility from it and it’s beneficial to us too,” Vakulenko said. “The way central banks act on the economy is the same way OPEC+ affects the oil market. Central banks have become more sophisticated in the way the move money supplies. OPEC+ might start to do the same.”

    OPEC+ ministers have acknowledged growing risks to oil demand but have so far given no indication of a change in strategy. The group hasn’t made any official proposals to change the production-cuts deal, according to Russia’s Energy Minister.

    When asked whether the OPEC+ deal was likely to continue, Vakulenko said: “It feels like it, yes.”

    “We believe that the mechanism as such, and the cooperation between OPEC and Russia has been rather fruitful. We’re looking forward to it continuing.”

    Russia’s average daily oil output has exceeded its OPEC+ target for most of this year. In September, the country exceeded its pledged cutbacks again, even after producers made deeper cuts from a month earlier.

    Not There Yet. OPEC+ faces a “serious challenge” if it wants to defend oil prices next year as it confronts a “daunting” supply surplus in the first six months of 2020 of about 1.2 million barrels a day, according to the International Energy Agency.

    However, Vakulenko said a slowdown in U.S. shale production will likely increase demand for supplies from OPEC+.

    “Long-term we think there will be some pull on OPEC+ crude from the market. U.S. shale is showing some signs of slowing down and demand keeps growing. At the same time it’s likely there may be higher calls on Gazprom Neft’s crude from within Russia.”

    Source: Hellenic Shipping News

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