Russian oil output slipping 8%

Is demand contracting this fast? My guess is no, which spells one thing - a supply crunch once demand attempts to 'recover'.

clipped from www.moscowtimes.ru Crude output will drop by nearly 8 percent from last year's level through 2013 if the government doesn't provide further aid to producers, Energy Minister Sergei Shmatko said at a meeting that Putin convened at a refinery outside St. Petersburg to talk to oil executives. Any potential incentives would further dent federal revenues, which are already expected to contract drastically this year on the back of low oil prices and the global economic crisis. Putin announced that the government was willing to discuss lower export duties for oil that is flowing or will flow later from eastern Siberian green fields. These new fields must also enjoy lower taxes, he said. Existing fields in western Siberia have been depleting, forcing companies to venture out into wilder expanses to the east. "The industry is stagnating," he said. Russia produced 488 million tons of oil last year, registering the first annual production drop in a decade.