Oil Markets Are Now Balanced, Says Russian Deputy Premier Novak

Global oil markets have balanced following last year’s coronavirus-induced collapse in demand, according to Russia’s deputy prime minister.

“The last few months we have seen low volatility, which means that the market is balanced, and the prices that we see today certainly correspond to the situation in the market,” Alexander Novak said to state television, according to the Interfax newswire. Crude will probably average between $45 and $60 a barrel this year, said Novak, who was energy minister until President Vladimir Putin promoted him in November.

Brent crude has surged 21% this year to $62.43 a barrel as energy use recovers in the U.S. and China and nations roll out vaccines. Prices have also been buoyed by deep supply cuts from members of the OPEC+ cartel, including Russia.

The Organization of Petroleum Exporting Countries and its partners — a grouping known as OPEC+ — have said they will try to quickly clear the surplus stockpiles built up during the pandemic.

Russia’s OPEC+ production quota increased by 125,000 barrels a day in January, and is set to rise by another 65,000 barrels daily both in February and March.

Novak also said the construction of the Nord Stream 2 natural-gas pipeline will go ahead, despite U.S. attempts to delay it. Work on the line, which is meant to take gas from Russia to Germany via the Baltic Sea, resumed in November.

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