Russia, Saudis tentatively offer to freeze oil output levels

DUBAI, United Arab Emirates -- Russia's energy ministry said on Tuesday that his country has agreed with OPEC members Saudi Arabia, Qatar and Venezuela to freeze oil production levels if other producers do the same.

See Full Article

The ministry quoted Energy Minister Alexander Novak announcing the decision following an unexpected, closed-door meeting involving the four countries in the Qatari capital, Doha.

The meeting reflects growing concern among major oil producers about the effects a prolonged slump in crude prices will have on their domestic economies.

Novak said the countries are willing to freeze output levels at January levels "if other oil producers join the initiative."

Getting other major oil suppliers to go along with that plan could be tricky. Prices have fallen sharply since summer 2014, leaving producers scrambling to win market share from competitors.

Oil prices rose following the meeting, with a barrel of benchmark New York crude trading up 77 cents at $30.21. A barrel of Brent, the international standard, gained 89 cents to $34.28.

Speaking to reporters after the meeting, Saudi Oil Minister Ali Naimi said producers would continue to assess the state of the market in the months ahead. He described freezing output at January levels was an adequate step for now.

All of the countries at the meeting except Russia are part of OPEC, which has refused to cut its official production targets in an effort to bolster faltering prices. Saudi Arabia dominates policy-making within the 13-member bloc of oil producing countries.

The aim of OPEC's keep-pumping strategy has been to attempt to ride out the 12-year lows in prices and force higher-cost producers, such as shale drillers in the U.S., out of the market.

Notably absent from Tuesday's meeting was Iran, which shares control of a major underwater natural gas field with Qatar. It is eager to ramp up its exports now that sanctions related to its nuclear program have been lifted, saying recently it aims to put another 500,000 barrels a day on the market.

Jason Tuvey, Middle East economist at Capital Economics, said Tuesday's agreement should help support prices. But he noted that only some OPEC members have signed on to the deal, and that compliance to the bloc's own quotas has long been a challenge for the group.

"And even if output is frozen, this will still be at extremely high levels," he added. "Saudi oil production remains close to record highs" of more than 10 million barrels a day.



Advertisements

Latest Economic News

  • Toronto Millennials dream of backyards but are stuck in condos: report

    Economic CTV News
    Toronto Millennials are the most educated group in Canada, but high housing costs are keeping some of the country’s most qualified workers in their parents’ basements or pushing them out of the province altogether, a new report suggests. Source
  • Facebook's Mark Zuckerberg apologizes to EU lawmakers over data leak

    Economic CBC News
    Facebook boss Mark Zuckerberg apologized to European Union lawmakers on Tuesday for a massive data leak, in his latest attempt to draw a line under a scandal that has rocked the world's biggest social media network. Source
  • What your kids should know about money in kindergarten, grade school and high school

    Economic CTV News
    Too many Canadians are reaching adulthood without the skills to successfully manage their financial futures, according to personal finance coach David Lester. The best way he sees to build that knowledge is for parents to start schooling their kids about money as early as possible. Source
  • The New York Stock Exchange just named its first female president in its 226-year history

    Economic CBC News
    The New York Stock Exchange for the first time in its 226-year history will be led by a woman. Stacey Cunningham, who started her career as a floor clerk on the NYSE trading floor, will become the 67th president of the Big Board. Source
  • New York Stock Exchange just named the 1st female president in its 226-year history

    Economic CBC News
    The New York Stock Exchange for the first time in its 226-year history will be led by a woman. Stacey Cunningham, who started her career as a floor clerk on the NYSE trading floor, will become the 67th president of the Big Board. Source
  • Ex-Valeant, Philidor executives convicted of kickback scheme

    Economic CBC News
    A former Valeant Pharmaceuticals International Inc executive and the former chief of mail order pharmacy Philidor Rx Services were found guilty on Tuesday of defrauding Valeant through a multimillion-dollar kickback scheme. The verdict, handed up by a jury in Manhattan federal court, comes on the heels of Valeant's announcement that it will change its name to Bausch Health Companies Inc as it seeks to distance itself from a series of scandals under its previous management. Source
  • Women cite 'grass ceiling' in male-dominated weed industry

    Economic CTV News
    JUNEAU, Alaska -- When Danielle Schumacher attended her first convention of marijuana activists about 15 years ago, she could count on one hand all the women in a room of older men. The lack of diversity struck the then-college student, who remembers feeling out of place but also determined to make her mark. Source
  • Airlines caving to Beijing despite White House protest

    Economic CTV News
    SHANGHAI -- Global airlines are obeying Beijing's demands to refer to Taiwan explicitly as a part of China, despite the White House's call this month to stand firm against such "Orwellian nonsense." The Associated Press found 20 carriers, including Air Canada, British Airways and Lufthansa, that now refer to Taiwan, the self-ruled island that Beijing considers Chinese territory, as a part of China on their global websites. Source
  • McDonald's workers in U.S. file sex harassment claims

    Economic CTV News
    NEW YORK -- Energized by the #MeToo movement, two national advocacy groups are teaming up to lodge sexual harassment complaints against McDonald's on behalf of 10 women who have worked at the fast food restaurant in nine cities. Source
  • OREA isn't backing down from GTHA affordability messaging after TREB controversy

    Economic CTV News
    TORONTO -- The Ontario Real Estate Association isn't backing away from its campaign on the lack of housing affordability in Toronto, even after harsh criticism from the province's largest real estate board. On Tuesday, OREA executives unveiled a Ryerson University report, which it sponsored, that found millennials in the Greater Toronto and Hamilton area are living with their parents longer as they struggle to find affordable houses in a market with limited supply. Source