Russian Federation weighs Opec proposal for oil production cutbacks

“Indeed, these parameters were proposed, to cut production by each country by up to 5 percent”, Novak said when asked if Saudi Arabia had made a proposal to cut output.

Oil volatility has climbed to its highest since 2009 as traders try to price in the uncertainty around supply cuts.

Oil prices increased on Friday in anticipation of production cuts by major shale companies, in a bid to reduce the global supply glut.

Alexander Novak, the Russian Energy Minister might with OPEC members in the coming month to discuss matters presumably proposing a cut in the oil production levels. A group of OPEC members, including Nigeria and Venezuela, have also pushed for their own emergency meeting ahead of the cartel’s June 2 gathering in Vienna as plunging oil prices erode state revenues.

That was far worse that analysts expected and underlined the weakness in the manufacturing sector of the world s biggest economy and top oil consumer.

Four OPEC representatives, who asked not to be identified, said they hadn’t heard of any plan for talks. Russian Federation has confirmed it’s ready to participate, according to Interfax.

Oil prices rose to the highest in three weeks on Thursday after Russian Federation floated the idea of coordinated output cuts among crude producers.

The United States Oil Fund LP (ETF) (NYSE: USO) was up 5.3 percent at $9.67, while VelocityShares 3X Inverse Crude ETN was down more than 16 percent.

Despite the fact that the speculation alone is pushing oil prices higher, and negative news suggesting the deal was purely speculation would likely see oil prices tumbling back down.

There has been a significant surge in oil prices having rebounded from last week’s 12 year lows of $26 per barrel.

“The longer prices are at these very low levels, the more pain OPEC and non-OPEC producers are feeling, but I think it would still be a very hard negotiating act to get all of the parties to commit to a cut and then follow through with it”, said Richard Mallinson, oil analyst at Energy Aspects.

Iran’s oil exports are set to rise more than a fifth in January and February from last year’s daily average, data from a source with knowledge of its loading schedules shows, revealing how Tehran is ramping up sales after the lifting of sanctions.

Non-OPEC Russia said this week it could cooperate with OPEC on production curbs, something it had been refusing to do for 15 years.

Saudi Arabia, the de facto leader of OPEC, has insisted that output cuts can only happen with the cooperation of other producers.