Oil futures are on the rise on Monday as United States markets are closed for the Labor Day holiday. Russia and Saudi Arabia underwhelmed investors as the world looked for the two oil producers to come to an agreement during an oil agreement talk.
The underwhelming agreement still caused WTI crude oil for October delivery (CLV16) to rise 1.42% on the news. Brent Crude for November delivery (LCOX6) rose 0.96% on the news.
A pending “significant” announcement from Khalid A. Al-Falih, energy minister of Saudi Arabia, caused oil futures to rise as much as 5%. The announcement was that Russia and Saudi Arabia would set up a group to monitor oil markets. The group’s main purpose is to recommend ways to help promote the world’s oil market.
Key points from the world’s two largest oil producers include a central divide.
Russia’s energy minister stated that the country is ready to freeze output in an effort to stabilize oil prices. Saudi Arabia insists that there is no need to freeze output just yet. Investors have dealt with much of the same discussions from Saudi Arabia, who has been reluctant to freeze oil output despite prices plummeting.
Russian President Vladimir Putin announced that he would like OPEC and Russia to agree on freezing output.
Iran remains a key figure. The country has not decided on whether it will freeze output levels or not. The country was under sanction and unable to sell oil until the start of the year. Iran’s oil production caused a potential for an oil output freeze to remain grim at the start of 2016, as major oil producers did not want to lose their market share.
Putin announced last week that the world’s oil producers now recognize Iran’s rights to produce oil and raise output levels.
The Russian president’s remarks helped oil rally last week.
Iran has announced that the country is ready to raise oil production to 4 million barrels per day in 2 – 3 months, according to Bloomberg.
