OPEC Chief: Russia on Board to Limit Output

Russia, the world’s biggest energy producer, is “on board” with an OPEC agreement to limit crude oil production to help rebalance the market, according to OPEC Secretary-General Mohammed Barkindo.

“We as OPEC remain committed to the Algiers accord. I have heard from the highest quarters in Moscow that Russia is on board,” Barkindo said, Bloomberg reported.

The Organization of Petroleum Exporting Countries, which pumps about 40% of the world’s oil, is trying to persuade producers from outside the group, such as Russia, to join the cuts. OPEC wants to put the changes into effect when it meets in Vienna on Nov. 30. The group has held talks over the past weeks with producer nations Russia, Azerbaijan, Brazil, Kazakhstan and Mexico.

Barkindo's upbeat comments helped prices gain some ground on Monday. Brent crude traded at $46.21 per barrel, up 63 cents, or 1.38%, from the previous close. US West Texas Intermediate crude was up 76 cents, or 1.72%, at $44.83 a barrel.

But prices remained more than $7 below last month's high due to persistent doubts over the feasibility of the group's plan.

Russia, the world’s largest energy producer, pumped at a post-Soviet record of 11.2 million barrels a day last month. With new fields ramping up production and more due to start producing before year-end, its output may climb further.

Russian Energy Minister Alexander Novak indicated that Russia was willing to freeze production for six months or more, rather than cut, and only if OPEC reached an agreement first.

The Algiers accord helped push oil prices to a 15-month high above $50 a barrel, but crude has subsequently fallen as several OPEC states disputed production estimates that would determine the size of cuts by individual members of the group. The producers will meet later this month in Vienna.

Without a deal, OPEC would return to the policy of pumping without limits to secure sales, author and energy consultant Daniel Yergin said in an interview.