Key members of the Organization of Petroleum Exporting Countries (OPEC) intend to meet with other producers in Russia on March 20, 2016 to renew talks on an agreement to cap oil output, Nigeria’s petroleum minister said.
Russian State Run news channel RT has also confirmed the development.
There will be a “dramatic price movement” when the meeting takes place, Nigerian Minister of State for Petroleum Resources Emmanuel Kachikwu said at a conference in Abuja, Nigeria’s capital.
Saudi Arabia, Russia, Qatar and Venezuela agreed on February 16, 2016 in Doha that they would freeze production, if other producers followed suit, in an effort to tackle the global oversupply.
“Both the Saudis and the Russians, everybody is coming back to the table,” Kachikwu said, adding that producers generally seek a recovery in the crude price to $50 a barrel.
Oil traded at an eight-week high Thursday of $35.32 a barrel in New York as the Doha accord fanned speculation that co-operation between OPEC and Russia could at least prevent the current supply glut from expanding.
Still, analysts have said that freezing production will do little to reduce the surplus, especially as Iran — which intends to increase exports following the end of international sanctions — dismissed the proposal as “ridiculous.”
Kachikwu didn’t specify whether Iran would attend the planned talks. The nation’s return to global oil markets after sanctions were lifted hasn’t lived up to its promises as it faces continued financial and logistical restrictions.
Oil prices hit 12-year lows of $27 last month. This prompted talks between the world’s two biggest oil producers – Russia and Saudi Arabia – who have agreed on an oil production freeze at January levels.
Qatar, Venezuela, Ecuador, Algeria, Nigeria, Oman, Kuwait, the United Arab Emirates said they are ready to join the agreement. This would be the first crude production pact since 2001, RT news reported.
Russia further indicated Iran and Iraq have welcomed steps to stabilize oil markets, but haven’t joined the deal.
According to Russian Energy Minister Aleksandr Novak, producers of three-quarters of the world’s oil are ready to cap output.
Brent crude was trading at $36.83 per barrel on Thursday March 3,2016 , while US WTI rose slightly to $34.70 per barrel.
Credit: Bloomberg, RT News