Russia working on options for oil accord with Opec, Novak says

[VIENNA] Russia said it's making progress toward an agreement with the Organisation of Petroleum Exporting Countries (Opec) before the two sides meet to discuss production at the end of the month.

"We are working on different options and mechanisms of coordination between Opec and non-Opec," Russian Energy Minister Alexander Novak said Monday in Vienna after talks with Opec officials. The discussions addressed "concrete" output levels, he said, declining to elaborate.

Opec is seeking to attract producers from outside the group to join plans for the first output cuts in eight years to support crude prices. While Russian President Vladimir Putin has pledged to cooperate, he's been vague about whether the country will trim output or just freeze production at September's post-Soviet record.

Russia believes an output freeze would be an "efficient tool" to rebalance the market but is considering different options, Mr Novak said Monday at a press briefing with Opec Secretary-General Mohammed Barkindo.

An Opec technical committee will meet at the end of October to discuss the allocation and implementation of production cuts. The group's next ministerial summit is scheduled for Nov 30 in Vienna, after which Russia will decide whether to participate in efforts to steady the market. The country is the world's largest crude exporter outside Opec.

Opec has invited a number of non-Opec countries to join the committee, according to Barkindo, who said Monday's talks were "very fruitful".

Crude prices plunged to a 12-year low in January, squeezing the budgets of producers from Venezuela to Saudi Arabia. The slide led Opec to abandon its two-year-old Saudi-led policy of allowing members to pump as much as they could to protect market share.

The oil market is now better but still not balanced, Mr Novak said. There's the risk of an increasing glut this Northern Hemisphere winter amid a slow recovery, he said.

BLOOMBERG