Russia just confirmed talks with Saudi Arabia — but oil is diving
The price of oil is sliding on Wednesday, despite rumours that Russia and Saudi Arabia have agreed to freeze output, and confirmation from Russia's oil minister confirming that he spoke with Saudi Arabian officials on Tuesday.
Near 2:00 p.m. BST (9:00 a.m. ET) both European and US benchmarks are lower by more than 1%, with investors seemingly jittery about the upcoming oil producer meeting in Qatar over the weekend.
Brent crude, Europe's benchmark has fallen by 1.12%, to $44.19 per barrel, and off a five-month high, while WTI crude has lost 1.45% to trade at $41.56. Here's how oil looks today:
Investing.com
Investing.com
Yesterday media reports that Russia and Saudi Arabia had held talks and agreed on an output freeze sent the price of oil sharply upwards, but since oil chief Alexander Novak confirmed the talks with Saudi oil minister Ali al-Naimi, oil's price has remained subdued.
"Now I do not want to comment prematurely on what will be discussed on April 17 in Doha. Let’s wait for the consultations. The talks were held yesterday, this is a fact, but I will not announce the decision beforehand," Novak told Russian news agency TASS, hinting that the two countries may have reached an agreement on a freeze.
"Everything is possible because these are open documents. Everyone who wants to join this will join. As for those who do not want to join - no one will force them," he added, possibly alluding to Iran's reticence on coming to the meeting. However, Novak did say that he was optimistic about achieving an agreement on a freeze.
While it looks like Saudi Arabia and Russia are willing to cooperate on a freeze, one of the big sticking points ahead of the Doha meeting is Iran's involvement in any freeze. Since reentering into the global markets in January after the lifting of sanctions, Iran has ramped up output massively, and the officials have said the country will continue to do so.
While it looks like Saudi Arabia and Russia are willing to cooperate on a freeze, one of the big sticking points ahead of the Doha meeting is Iran's involvement in any freeze. Since reentering into the global markets in January after the lifting of sanctions, Iran has ramped up output massively, and the officials have said the country will continue to do so.
On Wednesday morning, there were unconfirmed reports that Iranian officials are not even planning to attend the producer meeting, which is likely to have helped push oil lower.According to a journalist at Iranian publication Seda Weekly Iran's oil minister Bijan Namdar Zangeneh will not go to Doha on Sunday, but will instead send a delegate.
Opinions on a freeze in production — designed to address supply issues and boost oil's price are mixed. Saudi Arabia and Russia are both thought to be keen on the freeze, while a senior Iraqi official yesterday called a freeze "the only way".
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