Russian Federation not yet on board with OPEC production deal extension

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Russian Federation not yet on board with OPEC production deal extension

Front-month Brent crude futures, the worldwide benchmark for oil prices, were at $63.71 at 0017 GMT, 42 cents, or 0.7%, above Friday's close.

Russian Federation is the only major oil producer which has not yet signed up to an OPEC agreement on global output, Saudi Arabia's Energy Minister Khalid al-Falih said on Monday.

All eyes will be on the upcoming The Organization of the Petroleum Exporting Countries (OPEC) meeting during June 25-26, when it decides its output policy for the rest of the year.

China's crude oil imports slipped to around 40.23 million tonnes (9.47 million barrels per day), down from an all-time peak of 43.73 million tonnes in April, customs data showed on Monday, as the world's top importer of the commodity curbed shipments from Iran amid tightening US sanctions on that country.

"Also with the Mexican stalemate averted and no harmful shockwaves from this weekend G-20 meeting, risk assets should open with a bounce in their step and oil could trade favorably as WTI and Brent will continue to track the broader risk environment high", Innes said.

Moscow is concerned that the U.S. could increase its share in the market at the expense of Russian Federation, although Falih said he is hopes that the major oil producer can be convinced to back an extension of the OPEC agreement. The deal is due to expire this month.

But Novak no doubt wants an agreement, saying he could not rule out a drop in oil prices to $30/bbl if the deal is not extended, citing a risk that oil producers pump out too much crude and prices fall sharply.

President Vladimir Putin said last week that Russian Federation and the Organization of the Petroleum Exporting Countries (OPEC) disagreed over what constituted a fair price for oil, but that they would take a joint decision at the policy meeting.

"Over the past week or so, our economists have revised down their GDP growth outlook for the US, China, India and Brazil", Barclays bank said on Monday in a note about the economy and its impact on oil demand.

Despite this, MacPherson said "there is a limit to how much longer it (OPEC+) can continue to avoid addressing the serious challenge of being squeezed out by growing USA production".

"The revisions imply a 300,000 barrel per day reduction in our current global oil demand outlook of 1.3 million barrels per day year-on-year for this year", the British bank said. This article is strictly for informational purposes only. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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