Saudi Arabia has repeatedly called on non-members to contribute to output cuts if they want OPEC to help producers deal with the oil glut with the world running out of space to stockpile unwanted crude.
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Oil prices have halved since May on fears of a growing supply glut.
Oil volatility has climbed to its highest since 2009 as traders try to price in the uncertainty around supply cuts. It settled up 85 cents at $32.30 a barrel, a 2.7 percent gain, on the previous session.
He said that the topic of discussion at the planned OPEC meeting in February with representatives of other oil-producing countries could be the question of oil production reducing for each producer country at the level of five percent, but a general agreement is needed for it.
“If OPEC proposes to Russia production limits that do not undermine Russia’s long-term objectives, and key Russian producers back the deal, Russia may indeed agree to production limits”, said analysts from USA based ESAI Energy. Also proposed was a meeting among oil and energy ministers of both OPEC and non-OPEC nations to discuss the situation.
North American stock markets got off to a positive start Thursday, with Canada’s main index up about one per cent after trading began in Toronto.
According to Reuters, Russia’s Energy Minister Alexander Novak said that it is “reasonable” to discuss the ongoing decline in oil prices.
Also, the odds were against Russian Federation since its annexation of Crimea and the conflict in Syria, with the West doing all it could to alienate the country and denying its products market access.
Saudi Arabia’s deputy minister for company affairs at the Ministry of Petroleum and Mineral Resources said on Thursday that according to OPEC estimates, there is a global oversupply of around 2 million barrels per day. OPEC predicted in mid-January that the average daily production of the Russian Federation would amount to 10.74 million barrels of oil in 2016.
There has been a significant surge in oil prices having rebounded from last week’s 12 year lows of $26 per barrel. Saudi officials did not immediately comment on the proposal, and a Gulf OPEC delegate said it came from Venezuela and Algeria.
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But analysts and market watchers have been skeptical, saying it was unlikely a deal would emerge, particularly as Iran, which has boosted oil exports after the lifting of sanctions, seeks to recover its market share.
