Meanwhile, the price for November futures of the North Sea Brent oil mix increased by 2.84 percent to $48.16 per barrel and the price for October futures of WTI oil increased by 3.42 percent up to $45.66 per barrel as of 14:55 (GMT+4 hours) on September 5.
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The globe’s major oil producers have been unable to strike a deal on freezing output, due mainly to a dispute between Saudi Arabia and Iran over Tehran’s desire to boost levels after the lifting of sanctions.
Russian Energy Minister Alexander Novak said Russia and Saudi Arabia were moving towards a strategic energy partnership and that a high level of trust would allow them to address global challenges.
It should help set the agenda for an informal meeting between OPEC and other producing nations later this month in Algeria.
But Saudi Energy Minister Khaled al-Falih told Al-Arabiya television channel there was “currently no need to freeze production” after meeting Novak.
Several OPEC producers have called for an output freeze to rein in the glut, which arose as supplies from high-cost producers such as the United States soared.
In assessing the factors that have contributed to oil’s wild ride for the past month, Helima Croft, global head of commodity strategy for RBC Capital Markets, said that even if OPEC members reach a deal, crude prices will “be sloppy until year-end”.
Any deal between OPEC and non-OPEC producer Russian Federation would be the first in 15 years since Moscow agreed to cut output in tandem with the cartel at the turn of the millennium, although Russian Federation never followed through on that promise.
One source from outside OPEC said the Saudis were quietly telling the market that output could rise further in August to as high as 10.8-10.9 million bpd. “There is still a question whether they can cut production for a sustainable period”.
Russia’s Novak said he was open to ideas on what cut-off period to use if producer countries chose to freeze output.
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The oil market has been plagued by a stubborn supply glut that saw prices plunge to near 13-year lows below 30 at the start of 2016, and while it has recovered recently, it is still well off highs above 100 seen in mid-2014.
