Oil prices increased during the Christmas Eve session after the Russian Energy minister backed the latest OPEC decision to trim the oil supply.
The OPEC members, together with Russia, reached a deal earlier this month and decided to cut the oil supply by 500,000 barrels per day in order to push oil prices higher, in a market that is mainly affected by the current global economic situation together with oversupply. This leaves the daily production target at 1.7 million barrels per day, the lowest figure since October 2018.
The cuts, which are expected to be implemented on January 1, were backed by Russia, which together with Saudi Arabia are making almost half of the required reductions to reach such a goal.
Banks believe that OPEC supply cuts may not be enough to neutralize the American growing production, especially considering the rehabilitation of new pipelines that would make it easier to export oil for the United States. In fact, according to the Russian Energy Minister Alexander Novak, OPEC may be considering further rate cuts that will be discussed during the upcoming March meeting.
“We can consider any options, including gradual easing of quotas, including the continuation of the deal,” he said during an interview with the Russian TV channel RBC TV, “Everything will depend on how the situation develops in March and on the forecasts for the following quarters…At the moment, the situation is more or less stable on the market,” he added.
Novak also explained that such a policy will continue as long as it is effective and bring results while adding that Russia will cooperate with the OPEC as long as it’s necessary for the market.
The OPEC, together with its allies, is expected to meet in Vienna on March 5 and 6.
By 08:11 GMT the Brent oil futures were up by 0.12 percent, at 66.47. While WTI crude oil futures remained almost steady, gaining 0.05 percent, at 60.55.