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.
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But it is “worth noting that Sechin was reportedly absent from this week’s meetings between energy executives and government officials in which OPEC cooperation was discussed”, she continued.
Novak’s statement led to the highest jump in oil prices in three weeks. Until this week, Russian Federation had repeatedly stated its goal of keeping oil production stable even as prices tumble.
Oil rose on Thursday after a Russian official said that Saudi Arabia had proposed that oil-producing countries cut output by up to 5 percent each, amid a global supply overhang that has depressed prices for over a year and a half.
However, according to the source, the proposal has not come directly from Saudi Arabia but rather from OPEC members Venezuela and Algeria.
Oil sank to 12-year lows of around $27 a barrel earlier this month, from as high as $115 some 18 months ago, because of a US shale oil boom and a decision by OPEC to pump more to fight for market share against higher-cost producers.
The relief rally was triggered by the prospect of an alliance between Russia, Saudi Arabia and further OPEC countries to cut output.
United States crude oil prices, which recently fell below the $US30 threshold, climbed as high of $US34.82 a barrel. The source suggested any potential production cut deal would imply Iran would need to keep its output flat or raise it by 100,000 barrels per day.
Spending on global oil and gas exploration and production will fall nearly 20 percent this year to about $450 billion, according to consultant Wood Mackenzie Ltd, and independent United States explorers are expected to report losses totaling more than $15 billion this earnings season.
Russia’s president Vladimir Putin recently held a series of bilateral meetings with the de-facto leader of Saudi Arabia, the Deputy Crown Prince Mohammad bin Salman, regarding security and economic issues. Oil prices have fallen from around $115 in the middle of 2014, causing problems for Russia’s cash-strapped budget and pushing the Russian economy into recession.
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“The price path implied by our forecasts of Brent trading less than $40 a barrel for at least two quarters is required for the balancing process to take place, paving the way for a more sustainable increase in prices”, it added.
