Oil edges up; gains limited amid scepticism over freeze deal

Russian Energy Minister Alexander Novak said on Saturday that an oil production freeze would be one of the issues discussed by crude producers at their meeting later this month in Algiers.

After meeting Novak, Falih told Al-Arabiya television channel there was "currently no need to freeze production". "Then we were, 'What if there really is no agreement?' We came right back where we were".

Putin, speaking at a closing G20 news conference on Monday, repeated his call that Iran should be allowed to return to pre-sanction production - a key sticking point with Saudi Arabia - and also appealed for a "fair" crude price that "could be a bit higher".

Al-Falih described Saudi Arabia's agreement with Russian Federation as "important" and said the two producers would continue to cooperate.

Venezuela, which has consistently pushed for a deal to boost prices, hailed the agreement as "an important step in coordinating joint action between the biggest OPEC member and one of the biggest non-OPEC producers".

"Even though there will be discussions in Algeria, there's no strong feeling that anything will be done, so the supply remains high", Nunan said.

Novak said he was open to ideas on what cut-off period to use if producer countries chose to freeze output.

Novak said outright oil production cuts may also be discussed.

Iran has been the main factor preventing an output deal between OPEC and non-OPEC Russia as Tehran argued it should be excluded from any such agreement before its production recovers from Western sanctions that ended in January.

"We believe that the oil market rebalancing has been rather delayed". After 12 hours of talks the parties said they needed some more time for consideration.

Oil prices have already been on a negative trajectory, ProShares Ultra DJ-UBS Crude Oil (NYSEARCA:UCO), which is the trading instrument that we use to determine entry and exit prices for oil, had fallen from over $14.00 to as low as $7.75 before stabilizing at slightly higher levels, but the chart pattern we have identified in UCO suggests that downward path can continue. On demand, traders said Genscape data showed a draw of some 700,000 barrels last week at the Cushing, Oklahoma, delivery hub for US crude futures. "A coordinated and appropriate, collective decision on production will help bring balance and reduce inventories in a more timely manner".

  • Zachary Reyes