PRICE OF oil jumped after Russia and Saudi Arabia agreed to discuss ways to stabilise the oil market. The announcement was made by the countries’ energy ministers, Alexander Novak and Khalid al-Falih. The price of Brent crude oil initially jumped by 4% but then pared gains to stand 1% higher at $47.31 a barrel. A statement said the plan was to support the “stability of the oil market… ensuring a stable level of investment in the long term.” At the start of 2016 the price of oil fell to its lowest level in nearly 13 years due to a production glut and is still far below the $110 a barrel price recorded just two years ago. Mr Novak said the agreement, which might include attempts to limit oil output, was a “historical moment” between members of OPEC, which is the traditional oil producers’ cartel, and non- members, of which Russia is one. He added that Russia was willing to join an oil output “freeze”. The outline agreement, to set up a joint task force, was publicised at a news conference at the G20 summit taking place in the eastern Chinese city of Hangzhou. However the Saudi Arabian minister Falih said that freezing output was not “necessary” now. “Freezing (production levels) is one of the preferred possibilities but it’s not necessary today,” he told the Saudi-owned Al Arabiya TV after the cooperation agreement was unveiled. “The market is getting better and we have noticed that prices reflect this (improvement),” he added. Despite this immediate divergence of view, Mr Novak told reporters that he favoured choosing a month, from the second half of this year, which would be the benchmark for a production freeze.

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