Russia to cut 300,000 b/d by end of April: Novak

Russian Energy Minister Alexander Novak says he will meet with other participants in the OPEC supply cut deal in May to determine if the pact will be extended.  CNBC photo.

Novak says Russia has found market balance at current oil price

Russian Energy Minister Alexander Novak told reporters at IHS CERAWeek that by late April, oil producers in his country will meet the 300,000 b/d cut agreed to in the OPEC supply cut deal.

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Novak added Russia is currently meeting 50 per cent of its supply cut commitment and will likely increase that to 200,000 b/d by the end of March.

Concerning extending the supply pact, Novak says it is unclear if the deal will continue beyond June and a decision on a possible extension will be made shortly before the agreement is to expire.

“It’s a bit premature to talk about it right now,” Novak said through a translator. “We just need to wait a little bit and see what will happen.”

Factors including supply and demand and price volatility will determine if the agreement is extended says Novak.

“These are the things that are being continuously analyzed to understand current market trends,” he said.

In February, OPEC closed in on full compliance with the output cut by reaching 98.5 per cent according to a survey of OPEC production.

Novak told reporters that Russia’s tax regime and technological advancements allowed the country to weather the collapse in crude prices, adding he believes market balance at the current price level has been found.