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Russia says too early to discuss OPEC+ deal extension

Russia says too early to discuss OPEC+ deal extension
OPEC countries and allied producers need to discuss the situation on the market before making proposals for the cartel’s meeting in June, Russia’s energy minister has said amid calls to further extend output cuts under OPEC+ deal.

“I think it’s too early to talk about it [the necessity to extend the deal]. We need to meet and discuss everything,” Alexander Novak told reporters after he arrived in Jeddah, Saudi Arabia, where some of the major crude producers gathered for ministerial panel meeting, known as the JMMC, on Sunday. 

The top Russian energy official said the primary task now is to review a technical committee’s report and assess the situation on the oil market as well as the implementation of the deal reached between OPEC and non-OPEC states at the end of last year. The states agreed to reduce output by 1.2 million barrels per day in an effort to boost crude prices.

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While Russia adheres to the deal and is going to implement the stipulated cuts by more than 100 percent in May, it is ready to consider alleviating the cuts in the second half of the year, Novak said later on Sunday after talks with his Saudi counterpart, Khalid Al-Falih. The output may be partially restored in case the demand or market deficit is high enough, according to the minister.

“Overall the market is in a delicate situation,” Al-Falih said as cited by Reuters after the meeting, adding that China-US trade tensions affect it. He also stressed that global oil producers should focus their efforts on driving oil inventories down as it is one of the tasks of the December deal. The agreement should be equally implemented by all signatures, the Saudi minister added, as Riyadh has been one of the main contributors of the output reduction.

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However, some countries have already called for the extension of the OPEC+ cuts. On Sunday, OPEC member Nigeria said it hoped the deal would be extended till the end of the year. Another member of the cartel, the UAE, urged to keep the cuts in place till the market balances. Meanwhile Azerbaijan, which is one of the signatures of the OPEC+ agreement, also urged to further extend the agreement as the cooperation proved its effectiveness.

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