Page 121 - RusRPTMay21

9.1.1b Oil and gas sector news
OPEC+ JMMC recommended adhering to the previously agreed production quotas in May-July on April 27. This entails increasing production in May. The meeting of OPEC+ ministers has been postponed from 28 April to 1 June. To recap, OPEC+ countries have agreed to increase production 350kbbl/d in both May and June, and then 440kbbl/d in July. Russia is to increase its production just 39kbbl/d in May. Over May-July, its increase in production is to amount to a combined 114kbbl/d. On top of the rise in the OPEC+ quota, Saudi Arabia is to reverse its 1mmbbl/d voluntary production cut, increasing crude output 250kbbl/d in May, 350kbbl/d in June and 400kbbl/d in July. Assuming that Russia raises its oil output 114kbbl/d in total in May-July, with no growth afterwards, Russian oil and liquids production might amount to 471mnt and 514mnt, respectively, in 2021 (or -0.5% and +0.4% above the 2020 level, respectively) we estimate.
European gas storage refill season reverses into withdrawals on cold weather. The outlook for the 2021 European gas market continues to improve – after a return of unseasonably cold weather to Europe in recent weeks, the region’s gas storage facilities have been required to halt their just-started refill season to cover heating demand. The year-on-year gap with the then-elevated storage levels seen 12 months ago has widened from c26bcm on 3 April to c31bcm as of yesterday, per GIE data. Such a reversal is not entirely unprecedented – something similar happened in 2019 at this time (see chart
121 RUSSIA Country Report May 2021 www.intellinews.com