World oil prices rose on Thursday (Friday morning GMT), after Russia said they would hold a meeting with OPEC. In this meeting, possible production cuts crude oil could reach as much as five percent per country.
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Brent North Sea crude for delivery in March, the European benchmark, to settle at USD 33.89 per barrel in London, up 79 cents from Wednesday's close. Previously, Brent hit a three-week almost USD 36 per barrel.
According to the Russian news agency, Energy Minister Alexander Novak said that Moscow is ready to take part in a meeting of the Organization of Petroleum Exporting Countries (OPEC) aims to establish the possibility of coordination.
He also said the talks could be about cutting production to five percent per country, an action that would sharply tighten the supply of crude oil internationally.
head of commodities research at Capital Economics, Julian Jessop said the proposal should be taken seriously because Russia and Saudi Arabia each produces about 10 million barrels per day, representing nearly 20 percent of global supply.
Analysts at Barclays Research also downplayed the idea. "We remain very skeptical that the meeting would produce a credible supply cuts," they said in a client note.
"So, we see this as nothing more than an attempt to shift the market sentiment, and we do not expect that it will change the physical imbalance the market. There is a possibility that Russia was testing situations to gauge how far the OPEC members will respond to the idea of cutting (production)," said director of the Center for Global Energy Policy at Columbia University, Jason Bordoff.[idr]