Russia says OPEC, non-OPEC countries to discuss oil cuts

Russia’s energy ministry said today that OPEC and non-OPEC members would meet in Vienna on Saturday following a decision to cut global oil output.

The ministry told AFP that Russian Energy Minister Alexander Novak would be taking part in the meeting, which comes after Moscow said it was ready to reduce crude output by 300,000 barrels a day in the first half of 2017.

After months of disagreement, OPEC members had last week hammered out a deal to cut oil output for the first time in eight years.

The agreement ended weeks of uncertainty and volatility on crude markets as the key players bickered over who would shoulder the biggest burden of the cuts.

Oil prices shot up on the announcement, which was more ambitious than many analysts had expected.

Prices reached a 16-month high over OPEC’s announcement of the meeting late Monday but quickly dipped overnight as the lustre of OPEC’s decision to cut production faded.

On Tuesday at 0830 GMT, US benchmark West Texas Intermediate was down 39 cents on the day at $51.40, while Brent North Sea crude had dropped 31 cents to $54.63.

With crude prices above $50 dollars, US shale oil producers are dusting off dormant oil rigs as they gear up to raise production which could lessen the impact of any OPEC cuts.

“The price action speaks to me of a market that lacks conviction and momentum,” said OANDA senior market analyst Jeffrey Halley.

“As reality bites in a world awash with oil, producing countries will have to show some meaningful backbone on compliance, for probably the first time ever, to achieve the meaningful rally in oil prices that they so desire.”

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