- Fundamental factors coming into play: Energy Minister Novak
- OPEC doesn’t play same role given member differences: minister
When it comes to influencing oil prices, talk is cheap, according to Russia’s Energy Minister Alexander Novak.
“I think that verbal interventions are unlikely to play any significant role," Novak told reporters in Moscow Friday, after meeting with Qatari Energy Minister Mohammed Al Sada. “It is fundamental factors that are coming into play now.”
Novak expects the global oil market to re-balance, even after OPEC on Thursday stuck to its policy of unfettered production. Crude prices have rebounded almost 80 percent from January’s 12-year low to about $50 a barrel. While tensions between OPEC rivals, Saudi Arabia and Iran, scuppered a proposed output freeze in Doha in April, unplanned disruptions in Canada, Nigeria and Kuwait have effectively capped production.
“OPEC probably doesn’t play the same role it used to because there are many contradictions between its member states," and as output grows in some non-OPEC countries, Novak said. “OPEC is currently not making any pivotal decisions, those are more consultative meetings to assess current situation and so on.”
The overall production of non-OPEC states is declining, which helps the market re-balancing, Qatar’s Al Sada said.
The market is moving “in the right direction now and OPEC states did not see the need for a cap at the moment,” Al Sada said. “If the situation warrants a different strategy, then OPEC is a living organ, it reacts to the development as it happens.”
Russia retains its plan to increase oil output this year to 540 million to 542 million metric tons, from 534 million tons in 2015, Novak said.