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OPEC+ Likely to Extend Oil Supply Cuts as Russia Enjoys Comfortable Position

Despite a 16% drop in oil prices since September, Russia's economy remains resilient with higher than forecasted oil prices and a narrowing budget deficit.

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Overview

  • OPEC+ is set to consider whether to make additional oil supply cuts, with prices down by 16% since late September.
  • Russia is in a comfortable position with oil prices higher than its forecasts and its budget deficit narrowing.
  • Saudi Arabia, Russia and other members of OPEC+ have already pledged oil output cuts of 5.16 million barrels per day, or about 5% of daily global demand.
  • Russia's budget deficit narrowed further last month thanks to higher oil prices, a lower rouble rate and an inflow of quarterly tax payments.
  • Analysts predict that OPEC+ are likely to extend or even deepen oil supply cuts into next year, after a more than 15% drop in Brent prices from a peak in September.