Other oil producers have welcomed the agreement between Saudi Arabia and Russian Federation to stabilize the oil market, including limiting output. However, the rally quickly fizzled as investors began to doubt the viability of a production freeze.
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“Freezing [production levels] is one of the preferred possibilities, but it’s not necessary today”, he said after the cooperation agreement was unveiled.
A meeting between OPEC Secretary-General, Mohammed Barkindo and Iran’s oil minister to discuss global oil market conditions and crude prices has started in Tehran, the ministry’s official website reported on Tuesday.
In reaction, Brent North Sea crude leapt as high as $49.40 a barrel.
The Saudi Oil minister Khalid al-Falih said that a production freeze is not needed at the moment.
Brent for delivery in November stood at $47.55 a barrel, up 72 cents or 1.54 percent from Friday’s closing level.
The rhetoric continues about an oil production freeze including OPEC and Russian Federation, but it is just that, rhetoric. This news story is related to Latest/148219-Oil-prices-Asia-Russia-Saudi-talks/ – breaking news, latest news, pakistan ne.
On Monday, Russia and Saudi Arabia agreed to cooperate in the world oil market to overcome a supply glut that has sent oil prices to record lows.
Boosting crude prices to that level would likely require major producers to freeze production, a goal that has eluded them in the wake of an epic price collapse that began in 2014.
“We believe that the oil market rebalancing has been rather delayed …”
He said countries now recognize that Iran should be allowed to continue raising production as sanctions have been lifted against the country. “And certainly joint actions which were considered at the beginning of the year, including a freeze, could have drawn much nearer the date of rebalancing of the respective markets”, Novak said on Monday. He added, “The market is improving day after day and prices reflect this enhancement”.
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Oil prices erased early losses to trade higher on Wednesday, but the gains were limited as market participants remained sceptical whether producers would reach an agreement to freeze output to rein in a global supply glut.
