The Russian ruble recently hit an all-time low against the USA dollar while its economy by all accounts remains mired in a long recession that started with the plunge in oil prices in 2014.
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Opec’s oil output rose to 32.6 million barrels per day in January from 32.31 million barrels in December, according to the survey, based on shipping data and information from sources at oil companies, Opec and consultants.
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.
That said, even if an agreement is reached, the incentives to stray from the agreement are very high.
On Wednesday, Venezuela’s President Nicolas Maduro stated that Eulogio Del Pino would visit OPEC member states to drum up support for holding a meeting on stemming the fall in oil prices.
“It looks more and more like this is the first sign of surrender in the global production war”, Phil Flynn, a senior market analyst at Price Futures Group in Chicago, told Bloomberg. The EconoTimes content received through this service is the intellectual property of EconoTimes or its third party suppliers.
Oil price volatility has climbed to its highest since 2009 as traders try to price in an uncertain supply outlook after Russian Federation hinted it was open to coordinating output with OPEC just as Iran lifts exports following an end to global sanctions. “Saudi Arabia will participate in the output cut only if all the OPEC members as well as other big producers (like Russia) also reduce output”, CRISIL Research director Rahul Prithiani said. Novak cautioned that it’s “too early” to call anything a concrete agreement.
Oil prices jumped several percentage points on Thursday amid swirling speculation that the Organization of the Petroleum Exporting Countries (OPEC) is set to slash production.
Opec kingpin Saudi Arabia reported a record state budget deficit of around $100 billion pressured by faloling oil prices.
He also, according to reports, confirmed that a meeting was proposed between OPEC and non-OPEC oil producing countries, and that Russian Federation was prepared to attend.
The market has rallied over the past three days on the possibility that OPEC and non-OPEC producers could come together for a coordinated production cuts to offset oversupply.
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Iranian Oil Minister Bijan Zanganeh, attending a Franco-Iranian summit in Paris on Thursday, said Iran had not been contacted by Russian Federation about any cuts in output.
