OPEC Concerned Over Russian Crude Output

OPEC has been unsuccessful in persuading Russia to reduce it crude oil production. The OPEC secretary general met with Russia's energy minister in Moscow. After the meeting, Russian Energy Minister Igor Yusufov said Russia will continue monitoring the world oil situation. But he gave no indication that Russia will implement further cuts in oil production. For the first half of the year Russia cut back on production by 150,000 barrels per day in compliance with OPEC's request, however, in July Russia opted to go back to normal production since it felt world oil prices had stabilized. The move was not welcomed by OPEC. The oil organization decided to keep its production cuts through September, saying it is worried there will be another slump in oil prices. During Tuesday's meeting, the OPEC secretary general, Alvaro Silva, played down the differences. He said the oil organization would not use a price war to punish Russia for boosting production and praised Russia for helping stabilize world oil prices. But many analysts say OPEC is worried that Russian companies are aggressively expanding their production and looking for new markets, at the expense of OPEC countries.

OPEC will meet in September in Japan where they are expected to discuss possible increases in production quotas.