Russia's energy minister Novak on the wires
- Plans to propose discussing increasing oil output by 1.5 million bpd
- Sees that oil market is balancing and demand is rising
- Declines to comment how much Russia can increase its oil output
- Reasonable to implement output increase for one quarter, then monitor market's reaction
- Can meet in September to reassess the situation
- Q3 is a good time for a test as there is highest demand for oil during that time
No surprises as the 1.5 million bpd proposal was touted by Bloomberg over the weekend. This creates a very interesting situation ahead of the meeting this week.
The earlier reported 300k to 600k bpd increase is likely a proposal to seek compromise with Iran and Venezuela but if the two are not willing to come to terms with an agreement for a smaller output increase, we could yet see Saudi Arabia veto the agreement and go forth along with Russia to increase output by an even larger amount instead.
As I've mentioned before, other OPEC members are fighting the battle of keeping oil prices high but Saudi Arabia and Russia are waging war with the US on keeping up market share instead.
