Russian Monthly Oil Output Edges Off Record Amid Freeze Talk

Updated on
  • Production falls to 10.885 million barrels a day in February
  • Exports of crude, condensate decline 0.8% from previous month

Crude Oil Markets Remain Oversupplied

Russian crude and condensate output edged lower in February from a record the previous month amid talks with Saudi Arabia and other exporters about a production freeze.

Oil production fell 0.2 percent to 10.885 million barrels a day from January, according to data e-mailed from the Russian Energy Ministry’s CDU-TEK unit. That was a 2.1 percent increase from a year earlier.

Russia and Saudi Arabia, the world’s largest oil exporters, last month agreed on a potential output cap at January levels should other nations also freeze production. While Russia faces a second year of recession after crude prices fell to the lowest in more than a decade, the marginally lower output isn’t related to the talks on a freeze, according to Artem Konchin, a Moscow-based oil and gas analyst at Otkrite Financial Corp.

“Wouldn’t bank on it,” Konchin said in an e-mail. “Looks like a very minor deviation.”

Russian crude exports fell 0.8 percent to 5.341 million barrels a day from January, according to the Energy Ministry data. That was a 2.2 percent increase on February last year.

Stable Outlook

Output from Russia’s two largest oil producers Rosneft OJSC and Lukoil PJSC declined from a year earlier. Lukoil’s production fell 0.6 percent to 1.677 million barrels a day from January, while Rosneft output increased 0.1 percent to 3.781 million barrels from the previous month, according to CDU-TEK.

Production should remain stable in early 2016 as no new fields are coming on stream, Bloomberg Intelligence analyst Philipp Chladek said by e-mail. The next big move will be the start of Lukoil’s Filanovsky operation in the Caspian Sea, he said.

“Depending on when exactly it comes, and how much natural decline we will see by then, it may or may not cause a blip in Russian production,” Chladek said.