Page 9 - FSUOGM Week 27 2022

FSUOGM PERFORMANCE FSUOGM

Russian oil production starts to rise again

in June as economy stabilises

RUSSIA OIL production in Russia began to recover after benefited from a shift towards domestic pro-
dropping in the first few months of the war. Rus- duction. On balance, the fall in Russian GDP
Analysts believe it is sian oil output rose by almost 5% in June, Kom- this quarter looks like it will be in the order of
too early to talk about a mersant reported on June29. 10% quarter on quarter, not the 15% q/q we had
steady trend towards a At the same time, the export of Russian raw previously expected," Liam Peach, an emerging
decrease in exports and materials decreased by 3%, but oil refining is market economist with Capital Economics, said
production. growing due to seasonal demand for fuel within in a note.
the country and an increase in the supply of Kommersant reports oil production for the
petroleum products to Africa. Oil supplies to incomplete first month of summer increased by
India and China have expanded significantly in almost 5%, to 1.46mn tonnes per day (10.7mn
the same period. barrels per day). This is less than in January-Feb-
However, analysts say it is too early to talk ruary (about 11mn bpd), but more than in April,
about a steady trend towards a decrease in when the most significant decline in production
exports and oil production. At the same time, was observed (1.37mn tonnes per day). Produc-
Russian oil is no longer being sold at such a huge tion has stabilised at all major Russian compa-
discount as it was in mid-spring, when the Urals nies, while at Rosneft it is growing by 15%, the
blend was sold at a $30 discount to the bench- newspaper notes.
mark Brent. Exports of Russian oil in June decreased by
The good news on oil production came as 3.3%. A significant part of European exports
RosStat released a slew of upbeat economic data was redirected to other markets. "A holy place
that showed the economy has suffered from is never empty. New traders have appeared – no
sanctions less than economists feared. longer European, but Russian and Asian. Our
“The latest Russian data for May suggest that companies have reorganised, found new forms
activity, having declined sharply after Western and ways of working with counterparties –
sanctions were imposed in March, has started through traders or directly,” Deputy Prime Min-
to stabilise. Some sectors of manufacturing have ister Alexander Novak said in mid-June.

Week 27 07•July•2022 www. NEWSBASE .com P9