Oil Extends Gain From Three-Week High as Russia Flags OPEC Talks

US crude fell 46 cents to $30.99 a barrel recovering slightly from a session low of $30.30 a barrel. It ended Tuesday $1.11 higher at $31.45 a barrel

Oil Extends Gain From Three-Week High as Russia Flags OPEC Talks

Prices, however, pared most gains amid growing doubts over the deal to cut production by after media reports said that delegates from the Organization of the Petroleum Exporting Countries (OPEC) had not yet heard of any plans for talks and that Saudi Arabia had not proposed cuts.

The Moscow government has until recently been a strong supporter of keeping the oil fields running flat out despite the drop in prices in a concerted bid with the Saudis to chase rival United States shale producers out of the market.

Novak also said that it was reasonable to discuss the situation in the oil market and that OPEC was trying to organize a meeting with other producers next month.

Mikhail Leontyev, spokesman for Rosneft, Russia's biggest producer, said "he saw no grounds" to comment on the Energy Ministry's statement.

Iranian Oil Minister Bijan Zanganeh, attending a Franco-Iranian summit in Paris on Thursday, said Iran had not been contacted by Russian Federation about any cuts in output.

Oil prices have plunged since OPEC, led by its largest producer Saudi Arabia, decided in 2014 to defend market share rather than cut output as supplies grew. Although no firm date has been set for formal talks, bilateral discussions already have taken place with Qatar playing an active role, sources close to talks have told Breakingviews. OPEC quickly denied that a production cut was in the works.

While Saudi Arabia and Opec has repeatedly been calling on non-members to contribute to output cuts, Russian Federation has been shying away from production cuts citing technical issues. Until this week, Russia, which relies on energy for more than 40 percent of its budget revenue, had repeatedly stated its goal of keeping crude production stable even as prices tumbled.

Oil market analysts on Thursday (Jan 29) largely dismissed the possibility of coordinated production cuts by Opec and Russian Federation, saying the market's early positive reaction was based on false hope.



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