Russian Deputy PM Comments Driving Oil Markets Friday

Russian gas production has fallen by 18-20% to 671 billion cubic meters in 2022 according to Deputy Prime Minister Alexander Novak earlier.

• He said 470 bcm of this gas will have been delivered to domestic customers by the end of the year.
• At the same time, oil production in Russia will grow by about 2% to 535 million tonnes in 2022, Novak said.
• "By the end of the year, in the oil sector, we will reach an increase even in the production volume compared to last year by about 2% to 535 million tonnes. We will produce about 5% more petroleum products than last year," Novak said.
• "Yes, there is a partial drop in production in the gas industry by about 18%-20%, nonetheless, our gas sector will produce 671 billion cubic meters of gas this year, which is also a large amount, of which about 470 bcm will go to the domestic market," he added.
• Novak threatened that Russia could cut oil production as a result of the sanctions, comments which sent the oil markets higher in the European morning session. "We are prepared to see a partial reduction of production. At the beginning of next year we might have a decrease by 500,000-700,000 bpd. For us this is about 506%. This is a negligible amount, but such risks exist," Novak said.
• Brent FEB 23 up 1.5% at 82.2$/bbl
• WTI FEB 23 up 1.7% at 78.84$/bbl