Russia’s Crude Oil Production Hit a 1-Year Low
Russia’s crude oil production
Russia is the largest crude oil producer in the world. Russia’s energy ministry estimates that the country’s crude oil production fell by 40,000 bpd (barrels per day) to 10.91 MMbpd (million barrels per day) in August 2017—compared to July 2017. Russia’s crude oil production is at the lowest level since August 2016.
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Russia’s crude oil production estimates
Russia’s crude oil production averaged ~11.0 MMbpd in 2016—the highest level in the last 30 years. Market surveys estimate that Russia’s crude oil production could average 11.1 MMbpd in 2017.
Russia’s oil exports through oil pipelines
Russia and production cut deal
Russia agreed to cut its production by 300,000 bpd from January 2017 until March 2018 due to the production cut deal. Russia’s crude oil production was at 11.24 MMbpd in October 2016. Russia’s production has fallen ~3% since October 2016.
The fall in production could benefit crude oil (ERY) (ERX) prices. The expectation of a production cut deal extension beyond March 2018 could also support crude oil (FENY) (FXN) prices. Higher crude oil prices have a positive impact on oil producers’ earnings such as Rosneft, Stone Energy, and PDC Energy.
In the next part, we’ll discuss some crude oil price forecasts.