Reuters: Russia says Saudis proposing global oil production cut
Russia said on Thursday that OPEC's largest producer Saudi Arabia, had proposed oil production cuts of up to 5 percent in what would be the first global deal in over a decade to help clear a glut of crude and prop up sinking prices.
Benchmark Brent futures LCOc1 jumped as much as 8 percent on Thursday to nearly $36 a barrel on news of the potential deal, which if implemented would immediately reduce surplus global output exceeding demand by 1 million barrels per day (bpd). Brent was trading at $34 a barrel at 1540 GMT.
A turnaround in oil's fortunes would be welcomed by oil-rich countries where the price collapse has caused budget squeezes and political turmoil with some even forced to devalue their currencies.
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Update #1: Russia ready to discuss oil output cut with Opec -- Financial Times
Update #2: Oil surges on possible OPEC production cuts -- USA Today
WNU Editor: Many are sceptical that such a deal will be made .... Chances of OPEC, Russia oil deal slim to none (CNBC).
5 comments:
Even if a deal is reached it is to little to late.
It may well be "to little to late for Saudi Arabia, not for Russia though. Actually if prices stay at the current level Russia could probably just wait everyone else out and have pretty near complete control of the world oil market.
if the difficulties were real to cut production in russia, for technical reasons, the other producing countries could cut the part that would fit for russia and receive the net income of these russia sales. sorry my bad english...
The Saudi proposal is that "everybody" cuts production by 5%, which would reduce the global overproduction by 5%, and maybe raise the global price by as much as 10%.
It's not going to happen.
I concur Jay. not going to happen, and with most economies now facing a recession .... definitely not going to happen.
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