*Top oil officials from Saudi Arabia, Russia and several key Opec members to discuss supply glut

*Oil refinery in Japan. US crude prices may come under further pressure as oil inventories remain close to record levels. Photograph: Toru Hanai/Reuters

Oil prices surged temporarily on Tuesday, reaching their highest levels in more than a week after Russia and Saudi Arabia provided the markets with hope of an eventual deal to tackle a deep supply glut.
Representatives from two of the world’s biggest oil producers agreed to freeze production levels, in what could be the first deal between an Opec and non-Opec country in 15 years.
However a major sticking point in sealing a comprehensive deal may be Iran, which was absent from the talks and has been determined to raise production.
Brent crude for April delivery was up $2 at $35.39 (£24.76) a barrel, on top of 11% gains over the past two days. But it later retreated to $32.37, lower than it started the day’s trading, as traders and analysts grew sceptical about what was achievable.
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US crude rose by as much as $1.50, or 5.1%, to $30.94. It was the highest level since 8 February and came on top of Friday’s gains of more than 12%. The price later slipped back to $28.99.
The talks in Doha, which had been kept under wraps until recent days, involved powerful Saudi oil minister Ali al-Naimi and his Russian counterpart Alexander Novak, sources said, two figures who must reach an accord for any coordinated global action to hold any hope of success.
They were joined by Venezuela’s oil minister, Eulogio Del Pino, who has in recent weeks been visiting major oil producers to rally support for the idea of freezing production at current levels in an effort to halt a downward spiral in prices, sources have said.
“A production freeze dependent upon the involvement of Iran seems a bridge too far at this juncture,” said Matt Smith, director of commodity research at New York-based ClipperData, an energy data provider.
While the decision was a move towards bringing supply and demand into balance, analysts also cautioned that global inventories remain near record levels and are likely to dampen any price rallies.
“I’m adding to the short positions I have in US crude spreads as I only expect price declines from here,” said Tariq Zahir at New York’s Tyche Capital Advisors. “The output freeze will do nothing to alleviate excess supply.”
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Daniel Ang, an analyst at Phillip Futures in Singapore, said: “As much as we continue to believe that this is yet another meeting that would yield nothing, the markets remain wary of any sudden agreement that major oil producers could come to.”
Oil prices have fallen by more than 70% in the past 20 months, driven lower by near-record production both from Opec and other producers, such as Russia.
But analysts also cautioned of violent price spikes and market volatility in coming weeks should there be indications of serious production or stockpile declines.
US crude prices may come under pressure as oil inventories remain close to record levels and US refiners are cutting back their processing runs on falling profit margins.
WTI (West Texas Intermediate) may fall to below $20 a barrel as a drop in US crude demand outweighs cutbacks in production as domestic producers shut wells, BMI Research said in a note.

www.theguardian.com/business/2016/feb/16/oil-prices-rise-on-talk-of-output-cut-saudi-arabia-russia-opec

Meaning?

I think the idea is welcome

Hmmmm

This is nice. Been waiting for this in a long while. I pray the prices rises and surpass the 70% fall. Our naira shall be strong again.

Amazing

Ok.. Great

so what should I do now?

All Greek to me,can an economist pls help?

Abeg make ds thing come up quick haaa

Okay

BrightEye:
so what should I do now?

Oil price will sure increase as soon as all oil producing countries agree to cut production. The only problem is USA might decide to shore up its production of shale oil and flood the market with it.

No need to read it self.

abeg who read am?

You don't run a business for loss simply because you want to keep your customers. Its a welcome idea but Nigeria should start building refineries. We can't be suffering and be smiling

I hope it increases and saves the naira.

Bad news

Dahveydson:
Oil price will sure increase as soon as all oil producing countries agree to cut production. The only problem is USA might decide to shore up its production of shale oil and flood the market with it.

But then it will take a while to flood the market again looking at a period of day 12 to 18 months. Exactly why the Saudi's and co have been after market share. Imagine the market picking up and you sell at prevailing market prices for those 18 months.

Abeg is this the reason we re experiencing scarcity on our stations

How I wish Innoson motors can provide me with a car that runz on Coal..

Some people are funny. Praying for oil to dry. Same people will be happy and glad to comment when prize goes up. hypocrites. The country will crumble on it's knees without oil from south south.

NavierStokes:


But then it will take a while to flood the market again looking at a period of day 12 to 18 months. Exactly why the Saudi's and co have been after market share. Imagine the market picking up and you sell at prevailing market prices for those 18 months.

It's a risk USA are willing to make to dent Russia's economic dominance.

We need the price to come up oooo. So as to help this our dying economy. $50 per barrel don do us Jare. We no need oil boom. We just need an increase in the current price. Then we can think of diversifying. At least we'll need something to sustain us before alternative plans can be ready.

tanx God.

erico2k2:

OPEC are no longer relivant in oil production quota since the likes of the USA and Iran began producing crude.

erico2k2:

The way the oil trade is now even if Saudi stops all together it will have no effect on prices. There are just too many producers and cost of production is different in different regions. We have venuzuella, Russia. Iran. Who r flooding the mkt

Remember my response below some few days ago?:

"relevant", in the above ^^ is non-definitive.

Saudi Alone cutting production would jerk up prices.

A couple of bomb explosions in Abu Dhabi today would spike prices.

And of course, low oil prices is neither good for Saudi nor Iran (even though it's dirt-cheap), as we speak, both countries are in talks to cut production already. Even the Russians are planning to do likewise.

Didn't we do this dance some few days ago?

Abeg let it rise, hardship is too much. But why are our leaders dis lazy dat they can't think of how to create wealth in d event of oil price decline. Indeed oil is a curse on nigeria.

Dahveydson:


It's a risk USA are willing to make to dent Russia's economic dominance.

Question is, if the currently shaky Western financial institutions can afford to go another round of lending to shale companies. Mind you the Russians have plans to go up to 14million bopd.

Iran an USA will just be watching you guys like cat watching a hapless rat.

Russia and Idi Araba at work.. Na wetin reasonable meeting dey lead to.

NavierStokes:


Question is, if the currently shaky Western financial institutions can afford to go another round of lending to shale companies. Mind you the Russians have plans to go up to 14million bopd.

Of course I know that

That's a million dollar question. Anyway, If backed by Political will, I believe they'll go another round of lending to edge out Russia (which is unlikely).

But again, when two elephants fight, it's the ants and tortoise that get injured. That's where Nigeria's woes come in.

stop misinforming with erroneous headlines! they agreed to freeze output not cut and the price actually fell when markets realsied it was a freeze not a cut.