Reuters reports that Russian Energy Minister Alexander Novak said Saudi Arabia had proposed to cut production by up to five per cent in order to support weak oil prices.
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One Gulf member said de facto leader Saudi Arabia had no proposal to trim production by 5 per cent, after Interfax reported the country had suggested such a cut at previous Opec meetings, citing Mr Novak.
Currently, Russia produces about 10.1 million barrels of oil per day.
Anticipation that OPEC and non-OPEC producers could coordinate production cuts has been around all week, and a closing gain on Thursday would be the third in a row – a first this year.
Oil prices have plummeted from $115 (105 euro) per barrel in mid 2014, to around the $27 earlier this month, and gradually rose to $34 per barrel during last two weeks.
Vladimir Averchev, a market analyst and former director with BP’s offices in Russian Federation, told state-run media any talks of an agreement to cut output was welcome news.
The rebound in the oil market lifted share prices on Wall Street and other stock markets in another rollercoaster session.
Iran plans on increasing its oil output by 500,000 barrels per day and boosting exports, making any agreement among OPEC nations to slash its output incrementally hard to achieve.
“Potentially, this will happen with Russia’s cooperation limited to half the percentage reduction that OPEC members need to make for the adjustment”, analysts said.
“With more energy companies announcing cuts and OPEC contemplating a cut, it looks like oil is forming a bottom”, said Phil Flynn, an analyst at Price Futures Group in Chicago.
With little sign that tactic is working and the Russian and Saudi oil-dependent economies hurting badly from the price slump, there are signs that both countries could be willing to change tack.
“The chance of OPEC taking any decision to cut output is highly unlikely”.
“Indeed, these parameters were proposed, to cut production by each country by up to 5 percent”, Novak said when asked if Saudi Arabia had made a proposal to cut output. With Saudi Arabia’s intended outcome right around the horizon, the country would not back out right now.
Moscow has sent mixed signals, eventually saying veteran minister Sergei Lavrov, who nearly never comments on oil policies, would visit the UAE and Oman to discuss oil markets.
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Rosneft, Russia’s largest oil company, did everything it could to kill a rally in oil prices Thursday, with a spokesperson calling it “idiotic” and arguing it was based on a misreading of news reports.
