Oil Output Freeze Deal Could Drive Up Shale Production, Sink Prices

An agreement between members and non-members of the Organization of the Petroleum Exporting Countries (OPEC) to freeze oil production could lead to increased shale output and ultimately sink prices, contrary to the anticipated agreement's aim, Russia's finance minister said Friday.

MOSCOW (Sputnik) – Energy Minister Alexander Novak is expected to lead the Russian delegation at the September 26-28 International Energy Forum (IEF) in Algiers, Algeria, where OPEC and non-OPEC countries will renew talks on a possible oil output freeze.

"There is the possibility that there'll be an increase in oil production as a result of shale oil and then the prices will fall again," Siluanov said in an interview with CNBC, a US cable business news broadcaster.

The minister called Russia's budgeted $40 per barrel oil price estimate for 2017-19 "conservative."

"In our view, this is a balanced price at the moment. It's a price at which the oil producers, especially shale oil producers, are at their capacity levels at the moment," he said.