Mr Novak says Russia wasn’t surprised by US shale spike
The question keeps coming up: Do OPEC and Russia not see that their agreement to cut oil supply has allowed shale producers to grow their market share?
Russian Energy Minister Mr Alexander Novak, for his part, said that the increase in shale production was expected. And, had the group of oil producers not agreed to cut supply, they “would have been even more greatly affected.”
Russia, along with OPEC and other non-OPEC countries, agreed on Thursday to extend productions cuts until the end of 2018.
The deal to cut oil output by 1.8 million barrels a day was adopted last winter by the 14-member OPEC cartel, Russia and nine other global producers. The initial agreement was due to end in March 2018, having already been extended once.
Figures from the Energy Information Administration showed, but global oil output is not just up to those countries: American shale drillers increased their output every month this year, with production expected to reach 6.17 million barrels per day in December.
The increase in U.S. shale production and exports is seen as a threat to the pact’s effort to re-balance the market. Rising oil prices, largely a result of the group’s supply cut, were thought to have encouraged U.S. shale producers to come back online.
Asked by CNBC about that American market increase, Novak didn’t mince his words: “I am asked this question every interview and I have already answered it many times. This is not news for us. For some reason when people ask this question they seem to believe that we didn’t think that shale oil would grow.”
He said that “Either you underestimate us or you think we lack professionalism. I think that if you think we are professional you need to understand that we are including all this in our calculations.”
Source : CNBC