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Artificial policy to harm oil market: Russia

Saturday, 19 December 2015 8:34 AM [ Last Update: Saturday, 19 December 2015 8:34 AM ]

Russian Energy Minister Alexander Novak

The Russian energy minister says "artificial methods" would provide no solution to curbing oil price decline in an oversupplied market.

“The problem [of declining oil prices] is global. Artificial methods will not help solve it,” Alexander Novak said.

“With an artificial increase in prices, the production of [US] shale oil will be even greater, and this oil will get a larger market share,” he added.

Novak also said that there was hardly need for coordination between Russia and OPEC for stemming the oil price slump.

“Today, OPEC is not the structure regulating this market,” he said.

Oil prices have dropped from more than $100 a barrel in July 2014 due to high output from the United States and key members of the Organization of the Petroleum Exporting Countries. OPEC has refused to cut output in response to the price slump.

On Friday, oil prices fell for the third straight session as a higher US drilling rig count exacerbated the situation in a market glutted with petroleum.

US benchmark West Texas Intermediate (WTI) for January delivery dropped to $34.73 a barrel on the New York Mercantile Exchange, a fresh low since February 2009.

Furthermore, North Sea Brent crude for delivery in February was down to $36.88 a barrel.

The latest declines follow the OPEC’s decision to continue pumping at current levels despite the oversupply on the global market.

The oil producer group pumps 31.5 million barrels of crude per day.

OPEC kingpin Saudi Arabia, the world’s biggest oil exporter, has rejected other members’ calls for reducing crude output in a bid to adjust prices.

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