Russia, Saudi sign pact, may limit output in future * Trading seen robust as US back from holiday * Oil off one-week highs hit on Monday (Adds details, links, updates prices) By Osamu Tsukimori TOKYO, Sept 6 (Reuters) – Oil prices extended gains on Tuesday, buoyed after top producers Russia and Saudi Arabia agreed to cooperate on stabilising the oil market, but a lack of immediate action to rein in output capped gains. Iran said it would cooperate on the freeze once its output returned to 4 million barrels per day before sanctions, a level that could be reached within two or three months. Investec Bank Chief Economist Philip Shaw discusses on “Countdown”.
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Saudi energy minister Khalid al-Falih told a UAE-based television channel he was optimistic about cooperation with other producers ahead of a meeting this month in Algiers, adding that freezing production was not the only solution to a supply glut.
Novak described the announcement as marking a “new era” in cooperation between Russian Federation and Saudi Arabia and insisted that it would have a “critical significance” for oil markets, news agency Interfax reported.
Commenting on the announcement, Qatar’s Minister of Energy and Industry Dr. Mohammed bin Saleh Al Sada said that Qatar backs the statement of the world’s biggest two oil producers.
Crude rose the most in two weeks on Friday after President Vladimir Putin said he’d like the Organization of Petroleum Exporting Countries (Opec) and Russian Federation to agreeto a freeze, speaking before he travelled to China to meet Saudi Deputy Crown Prince Mohammed bin Salmanon Sunday.
If production is frozen at early-2015 levels, it would effectively mean an output cut as most producers – including Saudi Arabia, Russia, Iraq and Iran – have steeply boosted production since then.
Because of the US Labour Day holiday, electronic transactions from Monday will be booked with Tuesday’s for settlement purposes.
“We believe that the oil market rebalancing has been rather delayed”.
OPEC-member UAE “is keen on supporting and contributing to any common efforts aimed at achieving balance in the oil market”, he said in remarks cited by WAM state news agency. “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.
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Oil prices collapsed to as low as $27 per barrel earlier this year from as high as $115 in mid-2014, but have since recovered to around $50.
