Economy

Saudi Arabia works on convincing Russian Federation to join oil cuts

Saudi Arabia works on convincing Russian Federation to join oil cuts

OPEC members agreed to cut oil output on Thursday, although it's unclear by how much.

Three delegates said Opec and its allies could cut output by 1 million barrels per day if Russian Federation contributed 150,000 bpd of that reduction.

"I think the likelihood is that they will cut crude production rate, maybe not as dramatically as some people would like, to try and meet a balance between what the USA would like and their own personal interests".

In October, the oil price reached a four-year high of $86, but since then the price has dropped again to about $60 per barrel. "We just have to see how it will be distributed", another delegate said.

The producer group's de facto leader, Saudi Arabia, has indicated a need for steep reductions in output from January but has come under pressure from US President Donald Trump to push oil prices lower.

Traders said oil prices were being weighed down by weak global financial markets, which saw stock markets tumble on Thursday.

Earlier, Saudi Arabia urged OPEC and its allies to curb output by at least 1.3 million barrels per day, or 1.3 percent of global production. More broadly, the slide in U.S. oil followed a tumble in global stock markets on Tuesday, with investors anxious about the threat of a widespread economic slowdown.

More news: Packers OLB coach Winston Moss fired same day as Aaron Rodgers tweet

The Trump administration has sought to maintain oil production to avoid a run-up in prices as it tightens sanctions preventing Iran from exporting crude.

"OPEC is an independent organization, not a part of the US Department of Energy to take orders from Washington", said Zanganeh, who has left Tehran for Vienna to attend the OPEC summit on Thursday and Friday.

Russia, Saudi Arabia and the United States have been vying for the position of top crude producer in recent years.

The increase alone is equivalent to the output of major OPEC producer United Arab Emirates.

However, when oil producers realized the sanctions fell far short of what had been expected, fears of oversupply followed.

In a tweet on Wednesday, the president warned OPEC against restricting oil flows and said the world does not want to see higher oil prices.

One issue that might complicate relations between the United States and OPEC is the murder of Saudi Arabian journalist Jamal Khashoggi by people linked to the government in Riyadh.