Russian Federation and Saudi Arabia say they have reached a deal to “act together” to try to stabilize oil prices. WTI was at USD 112 a barrel in June 2014 before dropping 44% by December 2014 at USD 64 that was minus USD 49 per barrel in just six months.
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Russian Federation and Saudi Arabia are probably the two most important oil producers on the planet, with Saudi Arabia the de facto leader of the OPEC cartel of oil-producing nations. This is significant from a diplomatic standpoint too.
A Saudi-Russian agreement to cooperate in the oil market was quickly translated in the revival of oil prices on Monday.
Iran is ready to support any decision to help restore balance to the oil market after it regains its pre-sanctions market share, the Iranian Oil Ministry’s SHANA news agency reported on Saturday, quoting a minister.
LONDON, Sept 6 (Reuters) – Oil slipped below $47 a barrel on Tuesday, falling further from the previous session’s one-week high on receding hopes for imminent action to tackle a global supply glut.
A statement said the plan was to support the “stability of the oil market … ensuring a stable level of investment in the long term”.
Britain’s pound also dented the greenback, hitting a one-month high of 1.3360 as data showed the United Kingdom services industry bounced back strongly from the seven-year low that followed the vote to leave the European Union.
The two countries did not announce specific steps and many analysts think it would be hard for them to join with other big oil producers to restrain output, and that even if they agreed on action, it might not do much to boost prices.
The announcement was made by the countries’ energy ministers, Alexander Novak and Khalid al-Falih.
Privately some OPEC delegates were skeptical that attendees could agree on capping output in Algiers because Saudi Arabia failed to fully endorse a freeze.
In spite of today’s major public holiday in the U.S.A. – Labor Day – even before New York’s putative opening bell would have rung, crude oil prices have already see-sawed by 5.56% since Tokyo opened the week’s business some hours ago!
The last talk on output freeze collapsed in April as Saudi Arabia refused to sign on without Iran’s participation.
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However, the Saudis need Iran to freeze oil production to increase the global price. Novak said outright oil production cuts may also be discussed in Algeria.
