MOSCOW: Russia’s energy ministry said Tuesday that OPEC and non-OPEC members would meet in Vienna Saturday following a decision to cut global oil output.
The ministry told AFP that Russian Energy Minister Alexander Novak would be taking part in the meeting, which comes after Moscow said it was ready to reduce crude output by 300,000 barrels a day in the first half of 2017.
After months of disagreement, OPEC members last week hammered out a deal to cut oil output for the first time in eight years.
The agreement ended weeks of uncertainty and volatility on crude markets as the key players bickered over who would shoulder the biggest burden of the cuts.
Oil prices shot up on the announcement, which was more ambitious than many analysts had expected.
Prices reached a 16-month high over OPEC’s announcement of the meeting late Monday but quickly dipped overnight as the lustre of OPEC’s decision to cut production faded.
On Tuesday at 0830 GMT, US benchmark West Texas Intermediate was down 39 cents on the day at $51.40, while Brent North Sea crude had dropped 31 cents to $54.63.
With crude prices above $50 dollars, US shale oil producers are dusting off dormant oil rigs as they gear up to raise production which could lessen the impact of any OPEC cuts.
“The price action speaks to me of a market that lacks conviction and momentum,” said OANDA senior market analyst Jeffrey Halley.
“As reality bites in a world awash with oil, producing countries will have to show some meaningful backbone on compliance, for probably the first time ever, to achieve the meaningful rally in oil prices that they so desire.”
Some analysts say that last week’s deal will likely be finalised at Saturday’s meeting but doubts over its implementation remain.
“Reports that the group once again increased output in November will raise fresh scepticism,” analysts from Accendo Markets said.
Novak has called on Russia’s oil companies to slash output to comply with the decision.
By cutting 300,000 barrels a day, Russian will produce some 10.9 million barrels a day—a figure higher than when Russia had attempted to agree on a production freeze with OPEC members in the spring.
The slide in oil prices and Western sanctions over Moscow’s role in the Ukraine crisis have pummelled the Russian economy.