Top oil producers Saudi Arabia and Russia said on Monday that they have agreed to cooperate to stabilize the oil market, including limiting output.
Saudi Arabia and Russia said this on the sidelines of the G20 summit in China.
They said part of the agreement was to set up a task force to review oil market fundamentals and to recommend measures and actions that would secure market stability, Reuters said.
Russian Energy Minister Alexander Novak said the two countries were moving to a strategic energy partnership and that a high level of trust would allow them to address global challenges.
Saudi Energy Minister Khalid al-Falih said he was optimistic about cooperation with other producers ahead of a meeting this month in Algiers and that freezing production was not the only solution.
Saudi deputy crown prince told Russian President Vladimir Putin on the sidelines of the same summit said that cooperation between the two countries would bring benefit to the global oil market.
Due to the agreement, Brent crude futures for November delivery were up 1.12 dollars per barrel at 47.95 dollars per barrel after hitting a session high of 49.40 dollars.
U.S. crude for October delivery was up 1.11 dollars barrel at 45.55 dollars per barrel, after reaching a high of 46.53 dollars a barrel earlier in the session.
Brent rallied to above 50 dollars a barrel in late August, helped by growing talk of a coordinated production freeze, but prices have since fallen as few believe OPEC would act.
Iran, OPEC’s third largest producer, said it would only cooperate in talks to freeze output if fellow exporters recognized its right to fully regain market share.
Iran is ready to raise its output to four million barrels per day in a couple of months, depending on market demand, a senior official from the National Iranian Oil Company said.
“Even if successful, an OPEC freeze would likely be a short-term positive but a medium-term negative for oil prices,” Morgan Stanley analysts wrote in a note.