Russian Gas Output Recovers in Jan
Russian gas production grew 2.7% month on month and 3.8% year on year in January, reaching 68.1bn m3, data published by the energy ministry's data centre on February 2 shows.
The country's output was 6.2% lower yr/yr in 2020 at 692.3bn m3, owing to the impact of coronavirus restrictions on demand in key export markets and various other factors. Production began recovering towards the end of the year, though, and January marked the first in many months where output was higher than it was a year before.
Russia's biggest gas producer Gazprom flowed 6.4% more gas yr/yr in January, with supplies coming to 47bn m3. The company benefited from a surge in gas demand in Asia and Europe on the back of cold weather over the past month. Higher spot prices in Asia also drove some LNG away from Europe, clearing the way for Gazprom to expand its market share.
Oil
Russian oil and condensate production averaged 10.16mn barrels/day in January, down 10.3% yr/yr but up 1.2% m/m, as producers took advantage of eased Opec+ output restrictions. The oil cartel agreed to bring back an extra 500,000 b/d of supply in January, including 125,000 b/d of Russian volumes.
Russia has been permitted to ramp up production by a further 130,000 b/d over February and March, even as Opec's de-facto leader Saudi Arabia pledged to remove 1mn b/d of its own supply from the market starting this month, demonstrating how far it is willing to go to prop up oil prices and keep Opec+ together. Saudi Arabia is less comfortable with low oil prices than Russia, given that its economy is more reliant on crude exports.
West Texas Intermediate (WTI) surged above $55/b on February 2, while Brent near $60/b, supported by Saudi cuts and optimism about the demand recovery, as governments ramp up vaccination efforts. As of press time, WTI is trading at $55/b and Brent at $57.80.