OPEC+ output cuts have stabilized the global oil market but can’t last forever, Russia said as uncertainty persists over the future of the agreement beyond March.
“Oil-production cuts can’t be eternal; we will gradually need to make a decision on exiting” the accord, Energy Minister Alexander Novak said in an interview with state television channel Rossiya24. As one of the architects of the OPEC+ deal, Russia’s view is key, though the nation’s oil producers have long pushed for a relaxation of output curbs.
Russia needs to defend its market share and let its oil companies develop new projects, Novak said. The minister didn’t specify when the country may decide to withdraw from the agreement, but said he expects to discuss the matter with his OPEC+ counterparts next year. Global oil demand may surge as soon as next summer, he said.
Russia, which helped to cement the original deal between the Organization of Petroleum Exporting Countries and its partners back in 2016, has shown this year that it’s getting weary of limiting supply. The nation has consistently failed to comply with its quota, overshooting its target for eight months so far in 2019, according to Bloomberg calculations based on official statistics.
That trend has continued in December, with Russia pumping 11.252 million barrels a day so far this month, about 62,000 a day above target, according to official data seen by Bloomberg.
The country has come up with various explanations for its lack of compliance — from the limitations of a harsh climate to technical issues resulting from the Druzhba oil-contamination crisis. The nation’s largest oil producer, Rosneft PJSC, has criticized the OPEC+ deal, saying it serves the interests of Saudi Arabia — the de facto leader of OPEC — and the U.S.
In a revision to the deal in early December, Russia and its OPEC+ partners agreed to deepen their curbs in the first quarter of 2020 to 1.7 million barrels a day. Russia is set to enlarge its cuts by 70,000 barrels a day to about 300,000 a day.
Nevertheless, the nation requested that condensate be excluded from its target. Novak has denied that the change is a loophole allowing Russia to pump more oil and claim compliance. While Russia’s official statistics don’t provide a breakdown for crude and condensate, the Energy Ministry will regularly inform analysts, the media and OPEC about the composition of its output, Novak said.
OPEC+ will meet in early March to discuss options for future cooperation on supply.
Delays to Canada's deliveries of Pfizer-BioNTech vaccine doses keep getting worse – CP24 Toronto's Breaking News
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The Canadian Press
HALIFAX — Nova Scotia is drafting legislation around the sale of used police vehicles and equipment, after a man driving a replica RCMP cruiser killed 22 people last April. Justice Minister Mark Furey told reporters following a cabinet meeting Thursday the legislation will regulate how police vehicles are decommissioned, which will include, he said, ensuring they are stripped of equipment and decals. “We are certainly aware of the previous circumstances and the most recent circumstances,” Furey said. The minister made the comments a day after the Mounties said a 23-year-old suspect from Antigonish, N.S., may have driven a vehicle that looked like an unmarked police car and pulled over drivers. The vehicle in question, a white 2013 Ford Taurus, is similar to the car Gabriel Wortman used during his 13-hour, deadly rampage in northern and central Nova Scotia on April 18-19, 2020. Furey noted that under current law it’s illegal to impersonate a police officer. “When it comes to police articles and decommissioned police vehicles there is certainly some work to do to fine-tune that legislation and the ability to mitigate and prevent, as best we can, access to this equipment that is used to mock-up police vehicles.” he said. Furey said there are no plans to ban the sale of decommissioned police vehicles despite calls by the Opposition Progressive Conservatives to prohibit those sales. He said RCMP and municipal police services have been consulted and are in support of the government’s draft legislation. Furey is recommending the Liberal government table a bill during the next sitting of the legislature. This report by The Canadian Press was first published Jan. 21, 2021. The Canadian Press
Macklem says Canadian economy has strong stimulus for now – BNN
Bank of Canada Governor Tiff Macklem said the nation’s economy is flush enough with stimulus to survive the current downturn and doesn’t need additional help from monetary policy.
In an interview with Bloomberg News after a rate decision on Wednesday, Macklem said policy makers considered whether more measures were needed to spur growth — including a micro-cut of their 0.25 per centt overnight policy rate — but determined that “we have a considerable amount of stimulus in place.” The bank is expecting a quick recovery from a first-quarter contraction, a scenario that would eventually require it to pare back asset purchases.
“If the economy plays out in line or stronger with our outlook, then the economy is not going to need as much quantitative easing stimulus over time,” Macklem said. While the central bank has a number of tools it can use if needed to add stimulus, “in our base case we don’t expect that we will need to use them.”
In Wednesday’s decision, the central bank expressed optimism the economy remains on track to fully repair damage from the pandemic by 2023, even as Canada struggles with a wave of new COVID-19 cases and lockdowns right now.
Some analysts had speculated the central bank could turn bearish this week, with a fresh cut to shore up a recovery that is being hampered by a strengthening currency, on top of the worsening pandemic.
In the interview, Macklem said that the stabilization of financial markets has made a small rate cut a viable option, if needed.
“We discussed the degree of monetary stimulus we need, and if we thought we needed more, a micro cut was among the things we could do,” Macklem said by video conference. The bank’s governing council determined it wasn’t necessary, he said.
To be sure, there’s no prospect of any quick withdrawal of stimulus either.
At a separate press conference Wednesday, Macklem said any slowing of the QE program would be gradual. Nor is the the Bank of Canada poised to raise borrowing costs. It’s pledged not to hike its policy rate until economic slack has been fully absorbed, something not expected to happen until 2023.
There are other concerns. With inflation hovering below 1%, Macklem said the central bank is more worried about deflationary pressures than any temporary overshoot of its 2% target.
“We are aiming for 2% but we are going to use the band and we are going to use the risk management framework to get there as quickly as possible,” he said.
The weakening U.S. dollar is another challenge, with any further broad-based depreciation a potential headwind.
“To the extent that is weighing on our forecast and dampening growth in Canada, everything else equal, we’d need more monetary stimulus to get back to our inflation target,” the central banker said.
©2021 Bloomberg L.P.
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