Novak said on Thursday that it was reasonable to discuss the situation on the oil market and that OPEC was trying to organise a meeting with other producers next month.
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Strong U.S. labor figures and potential cooperation between Russian Federation and some OPEC members pushed crude prices well into the black in early Thursday trading.
“Even if OPEC were ready to change tack and coordinate output cuts, it is not obvious that Russian Federation would be a reliable partner”, Jessop said in a note.
But, like Saudi Arabia, Russia may want to see some of the new oil fields that have come online in recent years go out of business – particularly the U.S.’s shale oil play, which in just a few years has made the USA the world’s largest oil producer.
Despite the fact that the speculation alone is pushing oil prices higher, and negative news suggesting the deal was purely speculation would likely see oil prices tumbling back down.
The prospect of supply restraint by the Organization of the Petroleum Exporting Countries (Opec) and rivals has boosted oil prices to nearly $36 a barrel from a 12-year low close to $27 last week, despite widespread scepticism that a deal will happen.
Russia’s biggest oil producer has called the huge rally in the price of oil in the past couple of days “idiotic”.
Yet crude stocks at the Cushing, Oklahoma, delivery hub fell by 771,000 barrels, which supported the oil prices.
“In our view, 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”.
According to Reuters, Russia’s Energy Minister Alexander Novak said that it is “reasonable” to discuss the ongoing decline in oil prices.
Four unnamed delegates told reporters they hadn’t heard of Russia’s plans, and one Gulf member said Saudi Arabia has no proposal to reduce output.
Regarding the burden that Russia could share with OPEC, analysts said that despite Russian production of crude being close to Saudi Arabia’s, it is unlikely, that the country will effect the same level of production cut.
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If each country cut production by 5%, that would shrink global oil output by more than a million barrels a day, which is roughly equal to the current oversupply in the market, according to analysts.
