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Russia accepts the need to reduce oil production, and Saudi Arabia negotiates details

Russia is increasingly convinced of the need to reduce its oil production with OPEC, but is still negotiating with Saudi Arabia, the best producer of the cartel, on the date and size of possible cutting, Reuters said two oil sources.

Russia's energy ministry held a meeting Tuesday with Russian oil company leaders ahead of OPEC and its allies meeting in Vienna on December 6 and 7.

"The idea of ​​the meeting was to make Russia cut," said a source familiar with talks with Russian oil companies and ministries, "the key question is about speed and size." "Most have agreed that we can not stop immediately, but a gradual process like the last time," said a source who asked not to be named because he was not allowed to talk to the media. The Russian energy ministry refused to comment.

Russian oil companies Rosneft and Gazprom Petroleum refused to comment. Luky Oil, Tatnft and Surgut Oil Gas and Novatik did not respond promptly. OPEC and its allies, led by Russia, limit production on the basis of a deal reached in late 2016 to support oil prices.

Moscow has agreed to cut production by 300,000 bpd, or one sixth of the contracted total decrease of 1.8 million bpd, but Russian companies have been required to reach this level of decline for months.

Reduce oil output from the beginning of next year

Riyadh now proposes to OPEC and its allies to cut billions of barrels a day since January 2019 to halve the decline in prices, with Brent crude oil price drop this week falling below $ 59 for $ 85 due to concerns about the potential cloud. supply. If Russia carries the same percentage in such a reduction as it did in the existing agreement, its share in the cut will be 166 thousand barrels per day.

"It was also considered that this time the six-point cross was a tough claim," the source said. "We need to reduce, but we do not want to reduce it for a large amount," said another source familiar with the discussions.

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OPEC and its allies will meet in the midst of concerns over the global economic slowdown and the increase in US oil supplies, which is not part of the current deal.

Saudi Arabia is faced with the renewed demands of US President Donald Trump, who has asked Riyadh to refrain from cutting production and helping to further reduce prices.

Any decision on oil production in next week's talks could complicate the crisis that caused the killing of Saudi journalist Jamal Khashoggi within the Saudi consulate in Istanbul. Trump backs Saudi Crown Prince Mohammed bin Salman, despite calls from many US politicians to impose fierce sanctions on Riyadh.

Putin meets bin Salman during the G20 summit

Russian President Vladimir Putin will meet with Prince Mohammed bin Salman at the summit of the G20 summit, which will also attend Trump.

Moscow has so far not shown any commitment to any new reduction in production.

Putin announced on Wednesday that Russia was in contact with OPEC, but Moscow was satisfied with oil at $ 60 per barrel. The Russian president earlier said he would be satisfied with oil at $ 70. "We are in touch with OPEC and we are ready to continue our joint efforts if needed," Putin said.

Saudi Energy Minister Khalid al-Faleh said on Wednesday that his country will not only reduce its oil production. "In general, there is a possibility of co-operation this time in line with what happened in 2016, but Russia's position will certainly be crucial," JBC said in energy consultancy.

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