Saudi Arabia hopes to work with Russia for oil market stability, Prince Muhammad said after meeting the Russian president.
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Brent crude futures for November delivery were last up $1.93 per barrel at $48.75 a barrel at 0945 GMT and US crude for October delivery was up $1.60 a barrel at a session high of $46 a barrel.
Trade volumes were expected to remain light on Monday, with many investors in the US away for the Labor Day holiday.
Russian Federation and Saudi Arabia are the world’s two largest oil producers.
“The oil price will remain volatile over the coming weeks”, said Hans van Cleef, senior oil economist at ABN Amro.
“After all, if prices remain too low ahead of the meeting, there is a risk that at some point Russian Federation and Saudi Arabia actually need to act”.
Putin said last week that a new deal on oil output could involve some compromise on Iranian output.
As you know Saudi Arabia did not rule out the possibility of freezing outputs and discussions were ongoing for a long time on this issue.
Venezuela has presented an “alternative proposal” to be considered at the upcoming Algeria meeting that would help “stabilize both the volume of supplies to markets and the fair price for producers”, the Oil Ministry said in a statement.
The agreement, announced on the sidelines of the G20 summit in China, also covers bilateral cooperation in the oil and gas industry, “including the introduction of new technologies, exchange of information and experience in order to increase the use of technology in the production, processing, storage, transportation and marketing of hydrocarbon resources, production equipment, the provision of services, as well as in the fields of electricity and renewable energy”.
OPEC will also hold informal talks in Algeria later this month.
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.
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“Even if successful, an OPEC freeze would likely be a short-term positive but a medium-term negative for oil prices”, Morgan Stanley analysts wrote in a note.
