LONDON: Oil rallied by up to five per cent on Wednesday as top global producers Russia and Saudi Arabia vowed to stabilise the market after meeting at the G20 in China.
\nSaudi Energy Minister Khaled Al-Falih and his Russian counterpart Alexander Novak agreed to \u201cact together\u201d to steady the market, on the sidelines of the G20 summit in the eastern Chinese city of Hangzhou.
\nIn reaction, Brent North Sea crude leapt as high as $49.40 per barrel, and US benchmark West Texas Intermediate (WTI) soared to $46.53.
\nPrices later pulled back however as Saudi Arabia ruled out the need to trim back production, while traders questioned whether the pair would curb global oersupply.
\nThe two nations \u201cnoted the particular importance of constructive dialogue and close cooperation between the largest oil-producing countries with the goal of supporting the stability of the oil market\u201d, the ministers said in a joint statement.
\n\u201cTo this end the ministers agreed to act together or in cooperation with other oil producers,\u201d it read, adding they had agreed to set up a \u201cjoint monitoring group\u201d to offer recommendations to prevent price fluctuations.
\n\u2018NEW ERA\u2019: Novak described the announcement as marking a \u201cnew era\u201d in cooperation between Russia and Saudi Arabia and insisted that it would have a \u201ccritical significance\u201d.
\nHowever, there were no details on any deal to freeze oil output around current levels, just weeks before Moscow and the 13-nation Organisation of the Petroleum Exporting Countries (OPEC) crude cartel meet in Algeria to discuss a global supply glut.
\nThus far, major oil producers have been unable to strike an accord on freezing output, owing mainly to a dispute between Saudi Arabia and Iran over Tehran\u2019s desire to raise production levels after the lifting of sanctions.
\nAfter meeting Novak, Falih told Al-Arabiya television channel there was \u201ccurrently no need to freeze production\u201d.
\n\u201cA freeze is one of the preferred options but it is not needed for the moment.\u201d OPEC members Kuwait, Nigeria and the United Arab Emirates all welcomed the Saudi-Russian pledge.
\nKuwait \u201cbacks the outcome of these consultations for the sake of achieving a balance in the markets\u201d, acting oil minister Anas al-Saleh said.
\nEmirati Energy Minister Suhail al-Mazrouei hailed the \u201cpositive step\u201d.
\nNigerian Petroleum Minister of State Emmanuel Kachikwu added it was \u201cgood news\u201d that \u201cshould help firm the price\u201d if both sides agree to a \u201cstrong level of discipline in terms of production\u201d.
\nOPEC and Russia together account for about half of the world\u2019s oil output.
\nPresident Vladimir Putin had met Saudi Deputy Crown Prince Mohammed bin Salman in China on Sunday \u2014 and vowed to address a global glut and overproduction that has hammered prices for two years.
\nPutin, speaking at a closing G20 news conference on Wednesday, repeated his call that Iran should be allowed to return to pre-sanction production \u2014 a key sticking point with Saudi Arabia \u2014 and also appealed for a \u201cfair\u201d crude price that \u201ccould be a bit higher\u201d.
\nPutin \u2014 whose economy slumped into recession on the back of oil price falls \u2014 has already stated that an output freeze would be \u201cthe right decision\u201d and called for \u201ccompromise\u201d.
\nINVESTORS PONDER DEAL: Around 1645 GMT, prices had tempered their gains somewhat.
\nBrent for November delivery stood at $47.49 a barrel, up 66 cents from Friday\u2019s close. WTI for October was 75 cents higher at $45.19.
\n\u201cThere were no… immediate indications that this (deal) will lead to lower oil output,\u201d FXTM analyst Jameel Ahmad told AFP.
\n\u201cIf there is no agreement to change output, or at least remove the excessive oversupply in the markets then the same oversupply will continue to weigh on investor sentiment \u2014 and this has ultimately led to oil retracing nearly half its gains already.\u201d The oil market has been plagued by a stubborn supply glut that saw prices crash to near 13-year lows below $30 at the start of 2016.
\nWhile it has recovered recently, the price is still well off highs of above $100 seen in mid-2014.<\/p>\n","protected":false},"excerpt":{"rendered":"
LONDON: Oil rallied by up to five per cent on Wednesday as top global producers Russia and Saudi Arabia vowed to stabilise the market after meeting at the G20 in China. Saudi Energy Minister Khaled Al-Falih and his Russian counterpart Alexander Novak agreed to \u201cact together\u201d to steady the market, on the sidelines of the […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-3006","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-business"},"yoast_head":"\n