Yemisi Izuora/Agency Report
There is hope of possible oil price stability following a meeting between Saudi Arabia, Russia and Venezuela.
Oil prices rose nearly 2 percent on Monday on news that ministers from Saudi Arabia, Russia, Qatar and Venezuela would hold a previously unpublicised meeting in Doha this week, adding to speculation of a global output deal.
Benchmark Brent crude gained more than 60 cents in after-hours trading.
Russian Energy Minister Alexander Novak will attend the meeting in what would be the largest producer gathering since OPEC’s last formal session in early December, sources familiar with the matter told Reuters on Monday.
After settling at $33.39 a barrel earlier in the day, barely changed from Friday, Brent rose to more than $34 a barrel. That adds to Friday’s 11 percent surge, the biggest one-day jump in over seven years.
Venezuelan Oil Minister Eulogio Del Pino made no comment on his arrival to the Gulf state of Qatar on Monday, a witness said.
Del Pino has been visiting major oil producers to rally support for the idea of “freezing” production at current levels to stem spiralling prices, sources have said.
The meeting is the latest sign of renewed efforts by OPEC members to try to tackle – possibly together with non-OPEC producers – one of the worst oil gluts in history, which has pushed prices to the lowest in more than a decade.
Ibe Kachikwu minister of state for petroleum reosurces told Reuters the mood inside OPEC was shifting to a growing consensus that a decision must be reached on propping up prices.
Russia has repeatedly refused to cooperate with the Organisation of the Petroleum Exporting Countries despite the falling price of oil, but in the last few weeks Moscow has sent mixed signals about the possibility of cooperation.
On Monday, Russia’s representative to OPEC said it was in talks on coordinated output cuts with individual OPEC members, mainly Venezuela, but not with the organisation itself, news agency Interfax quoted him as saying.
“The fact that the market has reacted so strongly certainly indicates that these comments are being taken seriously,” analysts at Frankfurt-based Commerzbank wrote.
However, many analysts, including the International Energy Agency, are still sceptical OPEC will cut a deal with other producers to reign in ballooning output.
“We continue to believe that if prices were to be artificially supported with production cuts it would only give more expensive forms of production more room to breathe and would only solve the problem in the short term,” Phillip Futures said in a note.
Iran is exporting 1.3 million barrels per day of crude, and will be pumping 1.5 million bpd by the start of the next Iranian year on March 20, a vice president was quoted as saying last weekend.