REUTERS
Saudi Arabia and Russia, the world's two largest crude producers, agreed to freeze output after talks in Qatar, Bloomberg reported.
Freezing output at January levels will be "adequate" and the nation still wants to meet the demand of its customers, Saudi Oil Minister Ali Al-Naimi said in Doha after talks with Russian Energy Minister Alexander Novak. Qatar and Venezuela also agreed to participate in the freeze, Al-Naimi said, according to Bloomberg.
"A freeze would not create an immediate U-turn but it creates a better foundation for the price recovery in the second half," Olivier Jakob, head of oil consultants Petromatrix GmBh, said in a note to clients before the meeting concluded.
Oil pared gains after the announcement. Brent crude was 2.4% higher in London at $34.20 a barrel, having earlier climbed as much as 6.5%.
According the International Energy Agency, Saudi Arabia produced 10.2 million barrels a day in January, below the most recent peak of 10.5 million barrels a day set in June 2015. Russia produced nearly 10.9 million barrels a day in the same month, a post-Soviet record, according to official data.
Read alsoOil rises on chance of output cuts as producers to meetQatar will lead monitoring of output freeze agreement, the nation's Energy Minister Mohammad bin Saleh al-Sada said at a press briefing. Low oil prices haven't been positive for the world, he said.
More than a year since the Organization of Petroleum Exporting Countries decided not to cut production to boost prices, oil remains about 70% below its 2014 peak. Supply still exceeds demand and record global oil stockpiles continue to swell, potentially pushing prices below $20 a barrel before the rout is over, according to Goldman Sachs Group Inc.