Saudi Arabia, Russia agree to 'historic' oil market cooperation

Top oil producers Saudi Arabia and Russia made a joint statement at the G-20 summit in China on Monday aimed at stabilizing crude prices, media reports said.
Russia and Saudi Arabia recognize the need to contain excess volatility in the market, the statement said, according to Russian news agency Interfax.

The two countries will form a working group to monitor the market and draft recommendations to stabilize oil prices and ensure steady investment in the industry, Interfax said. The group will meet for the first time next month.

Crude oil futures rallied heavily in the build-up to the announcement and pared back slightly afterward. WTI futures for October remained over 3 percent higher on the day, however, at a little under $46 per barrel.

At the summit, Russian Energy Minister Alexander Novak said a production freeze would be one way to stabilize prices, according to Interfax.

Novak described Monday's announcement as an "historic moment" in relations between OPEC and non-OPEC members, according to Interfax. Saudi Arabia is de facto leader of the oil cartel, but Russia is not a member.

Several attempts to boost crude prices by freezing OPEC's output have fallen in the past, in particular because Saudi Arabia has been wedded to keeping output high to hold market share.

OPEC will hold informal talks in Algeria this month and member countries are scheduled to officially meet in Vienna in November. Russia's Novak will meet with his Saudi counterpart, Khalid al-Falih, on both occasions.

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