Russian Deputy Prime Minister Alexander Novak arrives at OPEC headquarters in Vienna, Austria, on Oct. 5, 2022.LISA LEUTNER/Reuters
Russian Deputy Prime Minister Alexander Novak said on Thursday he expected no new steps from the OPEC+ group of oil producers at its meeting in Vienna on June 4, Russian media reported, after the group announced a significant output cut earlier this year.
Novak also said that high U.S. interest rates and a slower than expected Chinese economic recovery were holding back oil prices from rising further.
Saudi Arabia and other OPEC+ oil producers announced cuts of more than one million barrels per day in April after crude prices in March fell towards $70 a barrel, the lowest in 15 months.
Novak said he expected Brent price to be above $80 a barrel by the end of the year, the state-owned news agency RIA reported. He said current prices of $75-76 reflected the market’s assessment of the global macroeconomic situation.
OPEC+ will hold an in-person meeting in Vienna this year.
“This will be the first face-to-face meeting in six months, we are waiting, as usual, for an assessment of the situation in the market,” Novak was quoted as saying by Izvestia newspaper.
“But I don’t think that there will be any new steps, because just a month ago certain decisions were made regarding the voluntary reduction of oil production by some countries due to the fact that we saw the slow pace of global economic recovery.”
He also said he hoped that oil demand will increase in the summer.
“But I repeat once again: we do not have the task of inflating prices – there is the task of balancing in order to ensure the interests of both producers and consumers.”
Sending another signal that no action might be required from OPEC+ at its next meeting, Russian President Vladimir Putin said on Wednesday that energy prices were approaching “economically justified” levels.
Putin said this month that production cuts implemented by OPEC+ were required to maintain a certain price level, contradicting assurances from other leaders of the group that it was not seeking to manage the market in that way.
Oil prices were little changed on Thursday as uncertainty over whether the United States will avoid a debt default weighed against the prospect of further OPEC+ production cuts.
Prices were supported by tightening of U.S. crude and fuel supplies and by a warning from the Saudi energy minister to speculators which raised the prospect of further cuts by OPEC+.