Russia says it is too early to tell if the market will be ready for additional oil in Dec

Alexander Novak, the Russian Deputy Premier, said that it was still too early to determine if the market will need the additional volumes of oil the OPEC+ group plans to produce beginning in December.

His comments could set the stage for a discussion on whether or not to implement the increase in oil production agreed upon by the group.

He said the group, including Russia and Saudi Arabia included, had not discussed any changes to agreement on the gradual phase-out of oil production cuts beginning in December.

OPEC+ cut its output by a total amount of 5,86 million barrels per daily (bpd), which is about 5.7%, of the global demand. This was done in a series steps that were agreed upon since late 2022.

The group is planning a 180,000-bpd increase for December, as part of the gradual unraveling of its latest layer of voluntary reductions that extends into 2025.

The hike was

delayed

Prices have fallen since October.

Novak responded to reporters when asked if there was enough room on the market to absorb barrels of additional product from December: "It is too early to tell, but we will monitor it daily."

Novak said that although oil consumption usually decreases in the autumn and winter months, demand has increased by 1.8 millions bpd so far this year.

Some doubt whether the global demand for oil will be as strong as expected.

Saudi Energy Minister Prince Abdulaziz bin Salman said that OPEC+ has always the option to quickly adjust its policy depending on the circumstances.

According to the U.S. Energy Information Administration's (EIA), in its Short-Term Energy Outlook Report, published on Tuesday, global and U.S. demand for oil will grow next year.

Not meet

Prior forecasts were lowered due to the weakening of economic activity in China, North America and Europe.

OPEC+ will hold its semi-annual meeting on Dec. 1 to decide the future policy of output.

Novak stated that it is still unclear if the event will be held in person or online. (Reporting and writing by Olesya Almakhova, Editing by Hugh Lawson & Toby Chopra; Writing by Vladimir Soldatkin)

(source: Reuters)