Oil prices bounce from early losses in Asia – AFP

Oil Production

Oil prices recovered from early losses Monday but traders moved cautiously after Russia and Saudi Arabia wrapped up a meeting on stabilising the crude market but offered no details.

President Vladimir Putin met Deputy Crown Prince Mohammed bin Salman on the sidelines of the G20 in China on Sunday and said they would work to address a global glut and overproduction that has hammered prices for the past two years.

However, they provided no information on how they would proceed, just weeks before Moscow and crude cartel OPEC meet in Algeria to discuss the crisis.

After falling sharply in early trade, Brent crude was up four cents at $46.87 at about 0650 GMT while US benchmark West Texas Intermediate was five cents down at $44.39.

Comments from Indonesian finance minister Sri Mulyani Indrawati on CNBC that she was “comfortable” with crude prices at $40-$45 a barrel, have also added pressure on the commodity. The only Asian member of OPEC, Indonesia exported $6.4 billion worth of petroleum in 2015.

Both contracts rallied three percent Friday after Putin said Russia and other producing nations should freeze output to stabilise fluctuating prices. Russia and OPEC together produce half of the world’s oil.

The previous attempt at reaching a deal in April were scuppered by OPEC member Iran’s refusal to agree to any output freeze, and there are worries about the chances of an agreement being reached in Algeria.

“At this stage, markets are probably just going to take the view that it needs to see some evidence, some tangible idea on what the agreement might actually amount to before responding to it,” Ric Spooner, a chief market analyst at CMC Markets in Sydney told Bloomberg News.

“We will get a lot of statements about it but probably nothing really concrete until we get to the stage of the Algiers meeting.”

The oil market has been plagued by a stubborn supply glut that saw prices plunge to near 13-year lows below $30 at the start of 2016, and while it has recovered recently it is still well off highs above $100 seen in mid-2014.