Russia's Novak: return to Oct'16 oil output levels possible

Russia's Novak: return to Oct'16 oil output levels possible

"This discussion about possible OPEC supply increases after the June meeting has put a brake on the oil price for the time being, so $80 is a big hurdle to overcome", Commerzbank strategist Carsten Fritsch said.

Russian Energy Minister Alexander Novak said production cuts could be eased "softly" if OPEC and non-OPEC countries see the oil market balancing in June, the Interfax news agency reported.

On the economic data front, United States durable goods orders fell 1.7% in April but the weaker reading was largely offset by a better-than-expected growth in orders minus transportation, which rose 0.9% to mark the third straight month of gains.

The existing deal came into force on January 1, 2017, and envisaged that global oil producers would cut their combined output by 1.8 million barrels per day (bpd) to cut bloated stockpiles and prop up oil prices.

The level is the baseline for the current agreement which expires at the end of 2018.

OPEC and some non-OPEC major oil producers are scheduled to meet in Vienna on June 22. Non-OPEC states pledged to jointly decrease oil output by 558,000 barrels per day, with Russian Federation pledging to cut production by 300,000 barrels daily.

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India imported 17.2 Million Tonne (MT) of crude in the month of April, down 5 per cent from 18.1 MT imported in the corresponding month last financial year.

Oil prices have jumped over 70% in the previous year due to a rise in demand and restricted supply by OPEC.

Oil prices have risen to $80 per barrel, the levels unseen since late 2014. "Because of the government's widening fiscal deficit, ONGC and OIL could be asked to bear part of the Indian government's fuel subsidy for oil, if prices stay above $60 per barrel for the fiscal year ending March 2019", said Vikas Halan, Senior Vice President at Moody's.

Novak was also quoted as saying on Saturday he expected Iran to reduce its output by no more than 10 percent as a result of the move by the United States to withdraw from a nuclear deal and reinstate sanctions against Tehran. The group is discussing a plan to boost production for the first time since 2016 by ending a period where they made significantly deeper output reductions than specified in their original agreement, said people familiar with the matter.

ET reported that the recent rally in global crude oil prices has inflated India's crude oil import bill by 23 per cent to Dollars 8.2 billion in the month of April despite the quantity of imports in the month falling by 5 per cent, fresh data published by Petroleum Planning and Analysis Cell (PPAC) showed.

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