Alexander Novak, Russian energy minister, said on Februar 16, 2017, that Russia considers it possible to extend its participation and will decide on the issue several months short of the agreement's expiry date.
The possibility of the OPEC extending its output reduction agreement for another 6 months is a prime topic of debate as a growing number of observers challenge the cartel's claim that its cutbacks have been effective and are enough to bring about a market re-balance – and now non-member Russia says such an extension may in the cards too.
Alexander Novak said: «In my opinion, it is too early to talk about it now; we have such opportunity and we should make the decision in April or May.»
11 non-OPEC countries, including Mexico and Kazakhstan, joined the agreement to cut total output by 1.2 million barrels per day (bpd) and pledged to reduce production by 558,000 bpd on a voluntary basis.
While news of Russia's participation in the OPEC agreement was greeted with surprise in some analytical circles, more recently it was revealed that the effort of non-members is to date not all that it's cracked up to be: Bloomberg data shows that 269,000 bpd of the pledged reduction of 558,000 barrels has been taken of the market, which translates to a 48 % compliance rate and a far cry from the 90 % - plus rate achieved by OPEC members.
Still, Novak's consideration of an extension could translate into a bigger overall success for the cartel, especially now that experts are openly doubting its ability to drive prices any higher than they already are.
Earlier this week, Tamas Varga, analyst for PVM Oil Associates, relied on OPEC data itself to suggest a possible course of action: «Based on OPEC's own numbers, the message is loud and clear: improve on compliance, cut production further, and extend the deal for the 2nd half of the year if you want to avoid yet another year of global oil inventory builds.»
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