Algeria Follows Russia in Saying OPEC+ Could Take Additional Measures as Oil Plummets

Saudi Arabia and Russia are the biggest producers within the OPEC+ group

LONDON: OPEC+ member Algeria said on Wednesday it would not rule out extending or deepening oil supply cuts as oil prices fell to a new five-month low even though OPEC+ announced cuts last week.

The Algerian statement came as Russian President Vladimir Putin landed in Saudi Arabia on Wednesday for talks with Crown Prince Mohammed bin Salman on oil, Gaza and Ukraine.

“Additional measures could be considered if deemed necessary to ensure a sustainable stabilization of the oil market,” the statement, attributed to Algeria’s energy minister Mohamed Arkab, said.

An OPEC+ source said it would be a surprise to consider further steps so soon after the group last week agreed to a new round of oil supply cuts for the first quarter of 2024, but it could not be ruled out.

“Too early but ready to do that if needed,” said the source who declined to be identified by name.

On Thursday, Putin will host Iranian President Ebrahim Raisi in Moscow for talks that will include oil market cooperation.

Saudi Arabia and Russia are the biggest producers within the OPEC+ group and the two are responsible for more than 20% of global supply.

Russian Deputy Prime Minister Alexander Novak said on Tuesday the group stood ready to strengthen oil production cuts in the first quarter of 2024 to eliminate what he said was speculation and volatility.

The Organization of the Petroleum Exporting Countries, Russia and other allies agreed last Thursday new voluntary cuts of about 2.2 million barrels per day (bpd), bringing its total reductions to around 6 million bpd of 6% of global supply.

OPEC+ is due to meet next in June but has pledged to take action if markets require it.

OPEC+ says it does not react to oil price volatility even though most of its members balance their budgets at prices above $80 per barrel.

Oil prices fell by 4% on Wednesday, and touched their lowest levels since June, as a larger-than-expected rise in U.S. gasoline inventories exacerbated worries about fuel demand. (Reporting by Ahmad Ghaddar and Alex Lawler, Editing by Alexandra Hudson, Dmitry Zhdannikov and Jane Merriman)

Source : Zawya