Oil nears $US35 a barrel on OPEC talks of cutting output

“Indeed, these parameters were proposed, to cut production by each country by up to 5 percent”, Novak said.

“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.

Crude oil futures fell around 1 percent in Asian trading on Thursday, eroding gains of almost 3 percent made in the previous session after Russian Federation held out the possibility of cooperating with OPEC to control global oversupply.

London-based capital market analysts Edison Investment Research has reduced its 2016 oil price forecast to $40 a barrel from $60. In order to start working through these issues, we need general agreement, it’s too early to talk about that.

With little sign that tactic is working and the Russian and Saudi oil-dependent economies hurting badly from the price slump, there are signs that both countries could be willing to change tack.

Oil prices have halved since May on fears of a growing supply glut.

Although U.S. oil output has come down from highs posted in 2015, it’s still at historically high levels that have compounded the global surplus of oil that’s helping to keep prices low.

Futures traded up 0.9% in NY after earlier climbing 2.7%, as Russian Energy Minister Alexander Novak said that while OPEC member Venezuela has proposed a meeting next month, nothing is scheduled.

Non-OPEC Russia said this week it could cooperate with OPEC on production curbs, something it had been refusing to do for 15 years since the ill-fated agreement with OPEC in 2001.

Tokarev said oil executives and government officials meeting in Moscow on Tuesday had reached the conclusion that talks with OPEC were needed to shore up the oil price.

Russian Federation was the world’s largest producer of crude oil in 2014, pumping just over 10 million barrels per day, according to the most recent Energy Information Administration stats. The relief rally was triggered by the prospect of an alliance between Russia, Saudi Arabia and further OPEC countries to cut output.

One Gulf member said de facto leader Saudi Arabia had no proposal to trim production by 5 percent, after Interfax reported the country had suggested such a cut at previous OPEC meetings, citing Novak.