Russian Ministry of Energy intends to discuss the attraction of investments in the oil and gas and power generation sectors of the two economies with the representatives of Saudi Arabia. This subject will be raised during the visit of the Minister of Energy, Alexander Novak, to Saudi Arabia, which is scheduled for October 22-23. It is also planned to meet with the Minister of Energy, Industry and Mineral Resources of Saudi Arabia, Khaled Al-Faleh. Earlier, Novak said that due to the outcome of the G20 summit, Russia and Saudi Arabia may freeze oil production at the level of July - September. It was also reported that Novak and Minister of Energy of Saudi Arabia Khalid al-Falih discussed the Algerian agreement at the World Energy Congress in Istanbul.
Vestnik Kavkaza invites our readers to get acquainted with material from Nasdaq.com about the current situation in the oil market.
Crude prices fluctuated between gains and losses on Friday, struggling to maintain recent strides from optimism over a tightening market as a stronger U.S. dollar weighed. U.S. crude for December was recently up 10 cents, or 0.2%, at $50.73 a barrel on the New York Mercantile Exchange, after trading as low as $50.21. Brent, the global benchmark, was up 36 cents, or 0.7%, at $51.74. "The market's taking more of a 'show-me' attitude," said Gene McGillian, an analyst at Tradition Energy, which has "taken some of the luster off of the rally.’’ A stronger dollar, which makes oil more expensive in other currencies, helped put pressure on oil prices as it gained throughout the morning. The Wall Street Journal Dollar Index, which pits the dollar against a basket of other currencies, was up 0.3% at 88.63. The lack of notable news on Friday "creates that vacuum where the dollar can flex its muscles," said John Saucer, vice president of research and analysis at Mobius Risk Group.
Oil prices have fallen after hitting a fresh one-year high Wednesday. According to some analysts, the pullback reflects the sentiment that the recent rally is unsustainable, as the world remains oversupplied and the glut is shrinking at a slower pace than previously thought. "Other than following near-term inventory trends, the most important event will be the OPEC meeting in Vienna at the end of November. While we think that there is too much at stake for OPEC to fail to reach an agreement there, downside risks to price if they get it wrong are greater," said Bernstein analyst Neil Beveridge.
Ahead of the meeting, OPEC member countries have been ramping up output, as have other producers including Russia, where production hit a record high of 11.2 million barrels a day in September.
Igor Sechin, the chief executive of Russia's biggest oil producer, Rosneft, said Thursday that the country could raise output by as much as 200 million metric tons a year, or 4 million barrels a day, according to Russian media.
"Oil prices appear to be extremely reactive to comments relating to higher production, especially during this period when oil prices are pricing in a potential OPEC cut later in November," said Barnabas Gan, an economist at the Singapore-based bank OCBC.
Russia has expressed interest in the past in collaborating with OPEC in a production cut, but the lack of a firm and clear commitment from Moscow is making some in the industry jittery. Without Russia's participation, OPEC's plan to cut production by 200,000 to 700,000 barrels a day could flop because members wouldn't want to cut their own production in case they lose market share to non-OPEC producers.
All eyes will be on the meeting between Russian Energy Minister Alexander Novak and Saudi Arabia's oil minister this weekend. Even if a deal is struck between OPEC members and Russia to rein in production, world output might still outpace demand, given the "risk that a further recovery in production from Iran, Libya, and Nigeria could offset at least some of the cuts allocated to other countries," said Tim Evans, a Citi Futures analyst. The acceleration in the number of active rigs digging for oil in the U.S. is also stoking worries that higher oil prices will entice more U.S. shale players to widen their spigots. Gasoline futures were recently up 1.6% at $1.5173 a gallon. Diesel futures were recently up 1.2% at $1.5780 a gallon.
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