Russia on Tuesday said it would take part in a meeting of OPEC and non-OPEC members as oil prices wobbled on doubts over the impact of an output cut deal.
Energy Minister; Alexander Novak will attend the meeting in Vienna on Saturday expected to nail down details on implementing the agreement reached last week.
After months of disagreement, OPEC members on November 30 hammered out a deal to cut oil output for the first time in eight years.
Moscow which is not a member of the oil cartel has said it is ready to reduce crude output by 300,000 barrels a day in the first half of 2017.
The OPEC agreement ended weeks of uncertainty and volatility on crude markets as the key players bickered over who would shoulder the biggest burden of the cuts.
Oil prices shot up on the announcement, which was more ambitious than many analysts had expected.
Prices reached a 16-month high over OPEC’s announcement of the meeting late Monday but quickly dipped overnight as the lustre of OPEC’s decision to cut production faded.
On Tuesday at 1100 GMT, US benchmark West Texas Intermediate was down 36 cents on the day at $51.43, while Brent North Sea crude had dropped 17 cents to $54.77.
– ‘Reality bites’ –
With crude prices above $50 dollars, US shale oil producers are dusting off dormant oil rigs as they gear up to raise production which could lessen the impact of any OPEC cuts.
“The price action speaks to me of a market that lacks conviction and momentum,” said OANDA senior market analyst Jeffrey Halley.
“As reality bites in a world awash with oil, producing countries will have to show some meaningful backbone on compliance, for probably the first time ever, to achieve the meaningful rally in oil prices that they so desire.”
Some analysts say that last week’s deal will likely be finalised at Saturday’s meeting but doubts over its implementation remain.
“Reports that the group once again increased output in November will raise fresh scepticism,” analysts from Accendo Markets said.
Commerzbank analyst Carsten Fritsch said that with Saudi Arabia trying to defend its market share, “it is hard to imagine how OPEC will convince non-OPEC producers to cut production”.
Novak has called on Russia’s oil companies to slash output to comply with the decision.
Deputy Energy Minister Kirill Molodtsov told Russian news agencies that the country’s oil companies would convene Wednesday for a meeting.
By cutting 300,000 barrels a day, Russian will produce some 10.9 million barrels a day, a figure higher than when Russia had attempted to agree on a production freeze with OPEC members in the spring.
The slide in oil prices and Western sanctions over Moscow’s role in the Ukraine crisis have pummelled the Russian economy.