MOSCOW (Sputnik) —The decision to extend the Vienna oil output curtailment agreement for additional nine months will sustain the oil prices and balance the level of supply and demand at the hydrocarbon market despite the fact that oil production in the United States is not covered by the deal, Zavalny said.
Earlier in the day, the parties to the Vienna deal on oil production cuts agreed to extend the agreement for another nine months — until April 2018.
“It is a very useful agreement in terms of reaching a fair, optimal balance of supply and demand and fixing the oil price in the interests of both buyers and producers, because some kind of turbulence in this balance is provoked by … oil production in America. But, as I understand, the extension of this agreement on reduction of output will facilitate the balance anyway as there is a technological limit of output in America and the balancing will take place without the market swing,” the Russian lawmaker said.
Sergey Shatirov, the deputy chairmain of the economic committee of the Russian upper house of parliament agreed with the position of Zavalny, underlining the importance of the deal’s prolongation for the Russian economy.
“The extension of the agreement will positively influence the stabilization of oil prices at the world markets, which is important for the Russian economy,” Shatirov told Sputnik.
In late November last year, the OPEC member states signed an agreement in Vienna on limiting oil production by 1.2 million barrels per day. On December 10, 11 non-OPEC countries decided to jointly cut oil output by 558,000 barrels per day with Russia cutting the output by 300,000 barrels per day for six months from January 2017.
