Oil market saw upward trend in prices in April-May

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AK&M 24 May 2021 15:03

In April-May, the oil market saw a steady increase in prices after neutral behavior in the first half of April, according to the recent issue of AK&M Information Agency's "RUSSIAN INDUSTRIES: PRODUCTION, FINANCE, SECURITIES. Oil and gas production, oil refining" monthly paper (No. 1423) dated May 19, 2021.

Traders' sentiment turned upbeat on the prospects for the global economic recovery and oil demand. This drove Brent futures close to the $70 mark on optimism regarding the lifting of COVID-19 induced restrictions in the U.S. and Europe. Oil prices are also supported by a weakening US dollar and high inflation expectations in the U.S. Furthermore, the excess oil inventories accumulated in storage facilities when demand was depressed during the pandemic, is almost exhausted, the expert community notes.

In January-April 2021, oil and gas condensate production in Russia amounted to 167.94 million tonnes decreasing by 10.1% year-on-year. In April 2021, Russia produced 42.81 million tonnes of oil and gas condensate, which is 7.8% below the April 2020 result. Looking at companies, NOVATEK was the only major ramping up production in January-April 2021 (+2.4%), according to majors' consolidated financial statements. Surgutneftegas saw the biggest decline (-14.0% YoY). In April, daily production of oil with condensate in Russia was 10.46 mbpd on average.

In January-April 2021, Russia's gas production reached 262.05 billion cubic meters (+8.9% YoY). In April 2021 alone, Russia produced 64.05 bcm of gas (+15.9% YoY). In April, Gazprom produced 43.8 bcm of gas, which is one-quarter above the April 2020 result; for the 4-month period, production amounted to 179.9 bcm (+13.7% YoY).

In the first quarter of 2021, Russia's revenues from oil exports declined 22.6% YoY to $19.824 billion, according to data from Russia's Federal Customs Service. Physical 3-month oil exports dropped 19.8% to 50.826 mt. In March, oil exports from Russia decreased by 0.1% vs February, while revenues increased by 7.5%. According to preliminary estimates by the Central Dispatching Department of Fuel Energy Complex (CDU TEK), oil exports from Russia reached 71.57 million tonnes decreasing by 17.2% YoY in January-April 2021.

In the first quarter of 2021, Russia's revenues from natural pipeline gas exports increased 32.2% YoY to $9.585 billion. Physical 3-month gas exports increased by 12.3% YoY to 56.1 bcm. Physical gas exports in March alone increased by 11.2% vs February, revenues by 9.6%. In January-March 2021, Russia reduced liquefied natural gas exports by 14.3% YoY to 14.3 bcm. Russia's LNG exports decreased by 33.3% YoY to $1.212 billion. According to preliminary data, gas exports to non-CIS countries for 4.5 months increased by 26.7% (by 16 bcm) to 76 bcm.

An in-depth segment review is provided in issue 1423 of the "RUSSIAN INDUSTRIES: PRODUCTION, FINANCE, SECURITIES. Oil and gas production, oil refining" monthly paper dated May 19, 2021