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Russia struggles to raise oil output despite price rally - sources

FILE PHOTO: An employee demonstrates a sample of crude oil in the Yarakta Oil Field, owned by Irkutsk Oil Company (INK), in Irkutsk Region, Russia in this picture illustration taken March 11, 2019. REUTERS/Vasily Fedosenko/Illustration

MOSCOW (Reuters) - Russian oil production has declined so far in June from average levels in May despite a price rally in oil market and OPEC+ output cuts easing, two sources familiar with the data told Reuters on Monday.

Russia’s oil and gas condensate was at 10.42 million barrels per day (bpd) during June 1-27 compared to 10.45 million bpd in May on average, the sources said.

Russian oil and gas condensate output also edged down in May from April.

Russia’s compliance with the OPEC+ oil output deal was at close to 100% in May, which means the state is about to exceed its target in June.

Russia’s energy ministry did not immediately reply to a Reuters request for comment.

Two industry sources said that lower output levels may be due to technical issues some Russian oil producers are experiencing with output at older oilfields.

Under a deal agreed by the OPEC+ group of leading oil producers in March, Russia’s production quota was allowed to rise by 130,000 bpd from April 1 to 9.379 million bpd, excluding the output of gas condensate, a light oil.

In early June, when Brent climbed above $70 per barrel, Russian Deputy Prime Minister Alexander Novak said the oil price reflected the balance of supply and demand and was “good enough” for Russia. Since then Brent has risen some $5 per barrel to its highest since 2018.

OPEC+ meets on Thursday this week to discuss supply for later this year. The group may discuss further boost in August, sources say.

Editing by Jan Harvey and David Evans

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