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

  • Vancouver's housing market third most expensive in the world: survey

    Economic CTV News
    VANCOUVER -- An annual international survey rates Vancouver as the third least affordable housing market on the planet and it also has a warning about Toronto housing. The 2017 Demographia International Housing Affordability Survey gives Vancouver a rating of 11.8, meaning median home prices are 11.8 times higher than median household income. Source
  • Documents reveal concerns, effects of CPP benefit limits for widows and widowers

    Economic CTV News
    OTTAWA -- Sheila was 62 when her husband died. For three years she continued to work full time as a nurse, collecting survivor benefits under the Canada Pension Plan. When Sheila retired at age 65 and began collecting her CPP retirement pension, she bumped into the financial ceiling the government places on the amounts retirees can receive under the public pension scheme and the survivor pension disappeared. Source
  • Canada should distance itself from Mexico in NAFTA talks: Former U.S. ambassador

    Economic CTV News
    Canada should distance itself from Mexico as U.S. President Donald Trump seeks to abolish or renegotiate the three-nation North American Free Trade Agreement (NAFTA), according to a former Canadian ambassador to the U.S. Derek Burney, who helped negotiate the Canada-United States Free Trade Agreement under then-Prime Minister Brian Mulroney, believes Canada and Mexico’s trade agendas share little common ground. Source
  • Striking Chronicle Herald workers mark one-year anniversary of labour dispute

    Economic CTV News
    HALIFAX -- The union representing striking workers at the Halifax Chronicle Herald are holding rallies throughout Nova Scotia Monday to mark the one-year anniversary of the labour dispute. The Halifax Typographical Union, which went on strike last Jan. Source
  • Why Trump will find it hard to make American economy greater

    Economic CTV News
    WASHINGTON -- President Donald Trump's economic plans are nothing if not ambitious: Annual growth of 4 per cent -- or more. A diminished trade gap. The creation of 25 million jobs over 10 years, including the return of good-paying factory positions. Source
  • Lawsuit: Donald Trump businesses violate U.S. Constitution

    Economic CTV News
    NEW YORK -- A lawsuit Monday alleged that U.S. President Donald Trump is violating the Constitution by allowing his business to accept payments from foreign governments. Trump is violating the so-called emoluments clause in the Constitution that prohibits him from receiving money from diplomats for stays at his hotels or foreign governments for leases of office space in his buildings, according to the suit filed by a legal watchdog group. Source
  • Brookfield moves to simplify North American property arm

    Economic CTV News
    TORONTO -- The largest shareholder of Brookfield Canada Office Properties (TSX:BOX.UN) is offering to buy the rest of the real estate trust's equity for $30.10 cash per unit, a 14.8 per cent premium to Friday's closing price in Toronto. Source
  • Donald Trump signs executive order officially pulling U.S. out of TPP

    Economic CBC News
    The new U.S. president doubled down on some of his campaign promises on Monday, including punitive tax hikes for U.S. companies that ship jobs overseas and sharp reductions in corporate taxes, red tape and regulations. Source
  • Trump pledges border tax, less red tape and trade renegotiations on first weekday in office

    Economic CBC News
    The new U.S. president doubled down on some of his campaign promises on Monday, including punitive tax hikes for U.S. companies that ship jobs overseas and sharp reductions in corporate taxes, red tape and regulations. Source
  • Statistics Canada says wholesale sales gained 0.2 per cent in November

    Economic CTV News
    OTTAWA -- Statistics Canada said Monday that wholesale sales gained 0.2 per cent in November to total $56.9 billion, as a drop in the auto sector limited overall gains for the month. The second consecutive monthly increase fell short of the 0.5 per cent for the month that had been expected by economists surveyed by Thomson Reuters; however, the October figures were revised 0.2 per cent higher than previously reported. Source