Renewed speculations that oil exporting nations may agree to a production cut has infused fresh life in oil prices. Brent Crude continues its positive momentum trading up by $0.50 to $33.60 per barrel, heading towards the $34 level. Meanwhile, U.S. crude futures for March delivery have recovered by 0.71% to $32.53 per barrel.
Russia prepares to address the oil glut
According to a report from Russia’s pipeline monopoly, Russian authorities have expressed interest in opening talks with OPEC members for curbing oil output so as to boost oil prices. The decision was arrived at a meeting held in Moscow, where all participants agreed that talks with OPEC members can help contain oil market turmoil. The move reflects Russia’s urgent tone as the country is on the edge of an economic slowdown.
Other OPEC members such as Venezuela, Algeria and Nigeria have also come forward with the recommendation of an oil output cut. These reports have instilled positivity not seen this year until now. Analysts are anticipating that the initiative from giant oil exporting nations is likely to reduce the downside risk for oil, which crashed to 12-year lows this month.
Balance to come in 2016?
Saudi Arabia’s deputy minister at the Ministry of Petroleum and Mineral Resources, Aabed A. Al-Saadoun has kept the global oil supply estimate at roughly around 2 million barrels per day. He added that the market will take some time to rebalance but sees demand for energy picking-up thereafter.
In its report published on Wednesday, the Energy Information Administration reported an increase in U.S. crude stockpiles of 8.4 million barrels per day. The data came higher than estimates of an increase of 3.3 million barrels per day. But, investors preferred to remain calm after noting a 771,000 barrels output decline at Cushing, Oklahoma.