Oil surges five percent following Saudi-Russia consensus on production

Saudi Arabia's Crown Prince Mohammed bin Salman and Russia's President Vladimir Putin attend the G20 Leaders' Summit in Buenos Aires. (AFP)

The price of oil has risen by five percent on Monday, a first market reaction following Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman’s sideline meeting at the G20 summit in Argentina.

Contributing to the five percent rise of oil prices is the US-China 90-day truce in a trade dispute.

The Russian president announced a consensus between Russia and Saudi Arabia to reduce oil production without specifying by how much. This happened ahead of the upcoming OPEC meeting in Vienna on Thursday.

Collective agreements

In an exclusive interview with Al Arabiya, oil expert Kamel al-Harmi said that there is a collective consensus to cut oil production.

His proclamation is based on the recent Buenos Aires meetings and Saudi energy minister Khaled al-Faleh’s statement that Saudi Arabia would be not be alone in reducing production, and that the decision must be collective.

Al-Harmi believes that it is important to see positive results in the market regardless of the reduction rate. Additionally, he sees that $70 per barrel is a suitable price for everyone, following Putin’s recent remarks that “we are comfortable with the price being $70 a barrel”

OPEC

Major oil players are scheduled to meet at OPEC on December 6. Russia and its allies will announce a plan to curb excess production, which has caused oil prices to fall by one-third since October.

Analysts predict that production will be reduced by 1 million to 1.4 million barrels per day.

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Last Update: Wednesday, 20 May 2020 KSA 09:54 - GMT 06:54
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