Russia, Saudi Arabia plan oil output task force

Oil prices rose Monday after Russia and Saudi Arabia announced they would cooperate on stabilizing oil output.

The two top oil-producing countries plan to hold a Russia-Saudi Arabia task force on oil and gas next month, the Russian and Saudi energy ministers Alexander Novak and Minister Khalid al-Falih announced Monday in a joint statement at the G-20 summit in China.

Their countries "recognized the need to restrain an excessive volatility of the oil market" and agreed to act together "in order to stabilize the oil market," they said in the statement.

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Neither offered specifics on what actions might be taken. Russia is not a member of OPEC (Organization of the Petroleum Exporting Countries), but earlier this year supported a freeze in production. Saudi Arabia also supported a freeze, however OPEC members Iran and Iraq were non-committal.

Russia is open to a freeze, Novak told BBC News, and called the agreement on a task force a "historical moment" between OPEC members and non-members.

Some sort of compromise is needed to bring stability to oil, Russian President Vladimir Putin said in a pre-G-20 interview with Bloomberg released Monday. "I would very much like to hope that every participant of this market that’s interested in maintaining stable and fair global energy prices will in the end make the necessary decision," he said.

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Oil prices have risen more than 30% so far this year after hitting historic lows of below-$40 per barrel prices. However, they remain far below the $100 or more fetched two years ago.

Upon news of the Russia-Saudi Arabia statement, the price of Brent crude oil, used to price international oils, rose by 4% but then fell to 1% higher at $47.31 a barrel.

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