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Russia's Novak Says Ready To Freeze Oil Output At January Level

Russian Energy Minister Aleksandr Novak
Russian Energy Minister Aleksandr Novak

Russian Energy Minister Alexandr Novak says Russia is ready to freeze oil production at January's level of 10.9 million barrels a day in an agreement with other major producers this month.

But he said other nations at a meeting of OPEC and non-OPEC producers on April 17 in Doha may propose freezes at different levels, such as February's output levels, and Russia is open to that as well.

"January is being discussed, as we agreed... But we will consider it in case there are proposals" at February or March levels, he told a news conference in Moscow. His comments helped spark another 6 percent surge in crude prices on April 8.

Novak said he is still hopeful that the Doha meeting will end with an output freeze agreement among major producers, even though Iran has said it will keep raising production and will not sign on to such a deal.

Russia, Saudi Arabia, Qatar, and Venezuela agreed in February to try to galvanize support around an output freeze in an effort to put a floor under falling oil prices.

Novak's comments came as Latin America's main oil exporters met and endorsed their efforts to stabilize prices.

Delegations from Colombia, Ecuador, Bolivia, Mexico, and Venezuela met in Quito, Ecuador, on April 8 and issued a statement calling on "OPEC and non-OPEC producers to take necessary actions to stabilize the world petroleum market."

Mexico and Colombia, like Russia, are not members of the OPEC oil cartel, so their participation in the meeting was notable. Mexico has been one of the world's top producers.

However, Mexico said it was only participating as an "observer," and its energy ministry pointed out that the country's crude output has already declined by more than a million barrels a day in the last decade.

Thus, Mexican officials said they cannot freeze or cut output in any kind of coordinated strategy to support prices. Mexico's oil output has been falling for over a decade due to underinvestment in its aging oil fields.

Ecuadoran Hydrocarbons Minister Carlos Pareja, who hosted the Quito meeting, said an agreement in Doha is urgently needed.

Oil prices at "less than $30 are incompatible with the cost of production, and don't allow us to make new investments, begin new projects, recover investment," he said. "That's a problem for all producers, OPEC and non-OPEC alike. No one escapes."

Talk of a production freeze continued to bolster world oil markets on April 8, pushing up the price of Brent Sea premium crude by 6.4 percent to $41.94 in London trading.

With reporting by Reuters, AFP, and TASS
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