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Oil Market Loses Its Bullish Edge

Oil Market Loses Its Bullish Edge

Bullish sentiment has dominated oil…

Russia Will Join Oil Freeze Talks After OPEC Members Agree In Algiers

Sechin Putin

Russia will join output freeze discussions with the Organization of Petroleum Exporting Countries only after its members agree on the terms of the deal amongst themselves first, according to three anonymous industry sources cited by Bloomberg.

The 14 members of OPEC will meet on 28 September on the sidelines of the International Energy Forum in Algiers next week.

The Russian Delegation, led by Energy Minister Alexander Novak, will attend the forum and hold meetings with foreign officials, but the group may leave before the OPEC meeting occurs on Wednesday.

Moscow would enter output freeze negotiations after receiving a formal invitation form OPEC to do so, the sources said, though the Russian Energy Ministry declined to comment.

Oil prices have been volatile leading up to the unofficial meeting in the Algerian capital. Crude prices dropped on Friday after sources close to Saudi Arabian and Iranian officials commented that the two rival regional powers may not come to an agreement during the meeting due to political and technical differences.

In April, Saudi Arabia walked away from a negotiated freeze deal at the last moment, after Iran refused to lower outputs as it rebuilt production capacity to pre-sanctions levels.

Russia agrees that Iran should be offered an exception to the deal as it restores the strength of its oil industry.

Related: Nigeria Sues Oil Majors Over $12.7 Billion In ‘Stolen Oil’

“Iran is starting from a very low position, connected with the well-known sanctions in relation to this country,” Russian President Vladimir Putin told Bloomberg earlier this month. “It would be unfair to leave it on this sanctioned level.”

Russian oil production reached a record high of 11.75 million barrels per day (bpd) last Tuesday, and averaged around 10.71 million bpd in the month of August.

The rise in Russian oil production has helped global supplies grow and, in turn, been influential in keeping prices low. Should this oil glut continue, OPEC could hold discussions immediately following the Algeria conference.

By Zainab Calcuttawala for Oilprice.com

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  • James on September 25 2016 said:
    Russia lacks the investment capital to maintain current oil production. Russian economic plans follow Venezuela's lead.

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