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Russia’s Deeper Output Cuts Based on Demand Outlook

OIL

Russia’s Deeper Output Cuts Based on Demand Outlook

Russia’s decision to deepen its crude output cuts in Q2 are based on forecasts for global demand growth, according to Deputy PM Alexander Novak.

  • “Given the current rate of demand growth, it was decided to cut the output by another 471,000 barrels a day in the second quarter,” Novak said.
  • The market outlook is weighing the mixed signals for the supply-demand balance: tensions in the Middle East remain, while China’s economic outlook is tepid.
  • Russia will make further cuts in April, slashing an additional 350k b/d of production while tapering export cuts from 500k b/d 121k b/d.
  • In May, Russia will cut 400k b/d of production and 71k b/d of exports. June’s production will fall 471k b/d.

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