Oil prices leapt up as much as three percent yesterday after Russian Federation ostensibly announced that it was ready to join the Organization of Petroleum Exporting Countries (OPEC) in curbing crude oil output. The comment from Rosneft chief executive officer Igor Sechin doesn’t contradict Mr Putin’s stance on a supply deal, the Kremlin said.
Advertisement
Oil prices jumped as much as 3 percent on Monday, with Brent hitting a one-year peak, after Russian Federation and Saudi Arabia both said a deal between the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC members like Russian Federation in curbing crude output was possible. Rosneft accounts for about 40 per cent of Russia’s crude oil output.
“The ministers emphasized that their two countries are committed to working together and with other producers, OPEC and non-OPEC, to help improve oil market fundamentals, which will benefit producers, consumers, the energy industry and the global economy”, the statement said. Last month the cartel estimated non-OPEC supply would drop by 610,000 barrels a day.
West Texas Intermediate oil for November delivery traded at $50.75 a barrel, down 4 cents, on the New York Mercantile Exchange at 10:03 a.m.in Sydney. “Rallies over the last two years have proved short-lived and self-defeating given that premature upturns have provided lifelines for United States producers to lock in price certainty”. The contract dropped 73 USA cents to US$52.41 on Tuesday.
The basket price slipped $0.21 to $42.89 a barrel, down almost $3 a barrel from a recent high of $45.84 in June.
Oil prices surged immediately after the deal-to-make-a-deal was announced on September 28, but later waned on skepticism whether OPEC producers may actually reach a specific deal and stick to it. The global benchmark was at a $1.28 premium to December WTI.
Advertisement
Following the meeting in the Algerian capital, Iraq’s Oil Minister Jabbar al-Luaibi and its OPEC Governor Falah Al-Amri challenged the secondary-source data at a press briefing, urging representatives of those sources to explain the discrepancy and demanding the figures be “corrected”. The date of the oil output freeze is expected to be presented at the cartel’s upcoming meeting on November 30.
