Russia sees oil price of $45-$50 per barrel 'acceptable' as it prepares for freeze deal

By Reuters/Vladimir Soldatkin   April 6, 2016 | 03:40 pm GMT+7
Russia sees oil price of $45-$50 per barrel 'acceptable' as it prepares for freeze deal
A worker takes oil samples from a well at the Gazpromneft-owned Yuzhno-Priobskoye oil field outside the West Siberian city of Khanty-Mansiysk, Russia, in this January 28, 2016 file photo. To match Exclusive RUSSIA-OPEC/FREEZE REUTERS/Sergei Karpukhin

Russia believes an oil price at $45-$50 per barrel is acceptable for the global oil market to balance, as it prepares to meet leading oil producers in Doha later this month, sources familiar with Russian plans said on Wednesday.

Leading oil producers plan to meet in Doha on April 17 to cement a preliminary deal reached between Russia, Venezuela, Qatar and Saudi Arabia in February to freeze oil output at levels reached in January, to curb a surplus on the oil market.

"Now there is discussion of how long production will be frozen and ways to monitor the agreement," one of the sources said.

"The level of $45-50 (per barrel) is acceptable from the point of view of market balance: if prices go higher shale oil production could start to recover."

Oil producers such as Russia and Venezuela are highly dependent on energy revenues, with their state budgets at risk after global oil prices fell to under $40 per barrel from over $115 in June 2014.

Russian sources said that the deal to freeze oil output is expected to speed up rebalancing of oil supply and demand by around half a year.

Russia was pumping at a 30-year high last month of 10.91 million barrels per day (bpd), even higher than its previous record in January.

The sources said Russia would not put new projects on hold as part of the freeze deal, and may use other methods to regulate its production. They said the agreement in Doha is set to cover production, not exports.

 
 
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