Russia basks in the oil price comfort zone ahead of OPEC+

Russia basks in the oil price comfort zone ahead of OPEC+
# 21 November 2023 16:25 (UTC +04:00)

Ministers from OPEC+, which groups the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, meet on Sunday in Vienna, APA reports citing Reuters.

OPEC+ is set to consider whether to make additional oil supply cuts, three OPEC+ sources told Reuters with prices down by 16% since late September as crude output in the U.S., the world's top producer, held at record highs, while the market was concerned about demand growth, especially from China, the No. 1 importer of oil.

"I don't see any reasons to change something radically," a source close to the Russian government said on condition of anonymity about the forthcoming OPEC+ meeting.

The source added that there was still a chance for surprises at the face-to-face meeting.

Saudi Arabia, Russia and other members of OPEC+ have already pledged oil output cuts of 5.16 million barrels per day, or about 5% of daily global demand, in a series of steps that started in late 2022.

President Vladimir Putin says Russia has not simply survived but has prospered despite the West's imposition of the most stringent sanctions ever imposed on a major economy, including a cap on the price of Russian oil at $60 per barrel.

After a contraction in 2022, Russia's economy is forecast to grow by around 3% this year, faster than either the United States or the Euro zone, according to Russian forecasts.

Russia has budgeted the price of Urals, its flagship oil grade, at 4,788 roubles ($53.36) per barrel this year.

The Urals price on Friday fell below the Western price cap level of $60 per barrel amid a rise in freight rates fuelled by fresh U.S. sanctions on shipowners and weaker global oil prices.

But it was still higher than 5,000 roubles per barrel and on Tuesday exceeded $60 per barrel again.

Budget plans published in September envisage Brent crude prices averaging $85 per barrel next year - more pessimistic than a Reuters poll forecast - and a Urals price of $71.30.

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