Opec+, the alliance between Opec and non-member producers, vowed to take a proactive response in rebalancing oil markets as the Covid-19 pandemic continues to hit global demand, top officials from Saudi Arabia and Russia said.
Saudi Arabia’s energy minister Prince Abdulaziz bin Salman and Russia's deputy prime minister and energy minister Alexander Novak met in Riyadh on Saturday and said countries participating in the output curbs agreement will “comply, cut and compensate for overproduced volumes”.
They also pledged to continue to monitor oil markets closely and "to act proactively and adjust supplies gradually and according to market requirements to accelerate the rebalancing process", according to a statement carried by the Saudi Press Agency.
Oil producing countries are currently cutting production by 7.7 million barrels per day to stabilise oil markets amid the pandemic. The group is set to increase production by 500,000 bpd in January.
"[With Russia], we are on the same page in our bilateral relationship and making sure that the market is stable and sustainable," pan-Arab newspaper Asharq Al Awsat quoted Prince Abdulaziz as saying during a joint press conference with Mr Novak on Saturday. "Continuous sustainability and stability is the pillar," he added.
Opec+ will meet on January 3 and 4 to discuss the current levels of adherence to the output restriction pact and to decide on further production hikes.
Brent, the international marker, was up 1.48 per cent and trading at $52.26 per barrel when markets closed on Friday, while West Texas Intermediate, the US gauge, rose 1.53 per cent to $49.10 per barrel.
Last week, Opec revised down its oil demand forecast for 2021 by 350,000 barrels per day but left its assessment for the current year relatively unchanged after factoring in uncertainty over the impact of Covid-19 on transportation fuels.
Global demand for 2021 is estimated to increase by 5.9 million bpd, largely due to the possible slowdown in demand for fuel in the first half of the year in OECD economies, according to Opec’s monthly oil market report.
Saudi Arabia and Russia will also strengthen bilateral energy cooperation between relevant stakeholders in the fields of oil and gas, electricity, energy efficiency and alternative energy, the statement said.
The two countries will also work towards "facilitating mutual investments in joint projects across a wide range of industries, joint production of high-tech products and other areas of mutual interest".