Russia, Saudi agreement may push crude price up — Kachikwu

IN a bid to further to tackle oil gloat, some members of the Organisation of Petroleum Exporting Countries are planning a round table meeting with Non-OPEC members in Moscow on March 20 to discuss on further cut in oil production.

This meeting, according to Nigeria’s minister of State for Petroleum Resources, Ibe Kachikwu would further cement the steady rise in the prices of crude being witnessed at the moment globally.

Dr. Kachikwu who dropped the hint recently in Abuja said if the other producers actually agreed to work together as planned at the proposed meeting, oil producers should expect more dramatic price increase.

“The Saudis and the Russians are coming back to the table and we’re very humbled to accept that if we get to a price of $50, it will be celebrated; that’s our target,” he said.

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Benchmark Brent futures were around $37 per barrel at 1215 GMT on Thursday. Early in the week, analysts had said that they see signs of stronger outlook after a 20-month rout.

Crude futures rose on Monday after gaining over 15 per cent last week, with some indicators pointing to the possibility that the market could be bottoming out. Brent futures, LCOc1, had climbed almost half a dollar, or 1.2 per cent, from their previous close to $35.51 a barrel by 0425 GMT on Monday.

United States (US) West Texas Intermediate (WTI) crude futures, CLc1, were up 16 cents at $32.94 a barrel after gaining over 15 per cent the previous week. Analysts said that first signs of a stronger outlook were appearing after a 20-month rout that has seen prices fall by 70 per cent.

“The US crude market seems to have passed the worst point and crude runs should start creeping higher, taking pressure off inventory levels. The latest EIA data on US production is also supportive as it indicates that the low prices are finally having an impact,” the director of JBC Energy Asia, Richard Gorry, said, referring to numbers from the US Energy Information Administration.