OPEC Seeks Clarification of Russian Position on Cuts
Algerian Oil Minister Chakib Khelil said OPEC hopes a trip to Russia before the cartel's March 15 meeting will clear up the status of Russia's commitment to cuts in oil exports. OPEC Secretary-General Ali Rodriguez and OPEC President Rilwanu Lukman will visit Russian officials in Moscow on March 11, with the hope of encouraging the country to prolong its 150,000 barrels-per-day decrease in crude exports that began in January.
"We asked them to prolong their cuts as long as we prolonged ours," said Khelil, also a former OPEC president. Andrei Illarionov, an adviser to Russian President Vladimir Putin, indicated Tuesday an extension of the Russian commitment to cut exports past March 31 wasn't likely.
Khelil said OPEC members were waiting until the meeting with OPEC in March before making any decision on production adjustments, and wouldn't rely on anything less than a declaration by the government of its intent.
OPEC secured agreements from non-member countries such as Mexico, Norway and Russia to cut production and exports in conjunction with a 1.5 million barrel per day OPEC decrease.
Prices haven't risen past the low end of OPEC's price band - a range of prices within which the cartel hopes to keep the price of their basket of seven crudes - and Khelil said slow worldwide demand would keep prices there for the immediate future.
"When demand expands, this issue of OPEC and non-OPEC won't be as critical," he said. "But demand is shrinking. We have a need for an agreement to stabilize the market."