Russia injects hope into morose oil market

Russia’s openness to deeper oil production cuts has generated optimism among OPEC members about a new push to clear a global supply glut. 

Moscow said on Friday it was ready to revise a deal reached between OPEC and non-OPEC producers in December 2016 to shore up prices through trimming output.

The deal has fallen flat as crude prices have continued to plunge since May, leaving producers to consider their next move.

No concrete plan is on the cards yet but Russia’s willingness to adjust the supply deal has encouraged OPEC members, especially ahead of a meeting by five oil-producing countries in Moscow on July 24.

There are also reports that OPEC was considering imposing production caps on Libya and Nigeria which are exempt from the output cut deal and have both raised production significantly in recent months.

The first deal between OPEC and non-OPEC members to cut production has failed to improve prices amid a rise in US output. New oil data also showed OPEC exports climbed for a second consecutive month in June.

According to Reuters, OPEC exports were 2 million barrels a day higher in June than in 2016, despite a May extension of a 1.8 million barrel a day production cut led by the Organization of the Petroleum Exporting Countries.

Weekly US government data also showed that US oil production rose 1 percent to 9.34 million barrels per day (bpd) while rig count rose to the most since April 2015 to 763.

On Friday, oil prices fell nearly 3 percent, with international benchmark Brent trading down $1.47 at $46.64 per barrel.

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