04 October 2018, Sweetcrude, Lagos — Saudi Arabia and Russia struck a secret deal in September to increase output, a report by Reuters quoting an anonymous source has said.
The report said the duo struck the deal in September before consulting with other non-OPEC producers, including the Organisation of the Petroleum Exporting Countries, OPEC.
A report by the medium on Wednesday had quoted President Putin saying oil is better off at between $65-$75 per barrel.
“We would be happy with the oil price at $65-$75 per barrel”, Putin had said, warning President Trump to stay off meddling in the management of the oil markets.
SweetcrudeReports had reported earlier in the week, how the U.S. Congress is currently debating a bill to revoke OPEC’s immunity and to allow the country to sue the organisation.
Reuters had yesterday, reported Putin saying Russia will not back down from its dialogue with global oil producers to balance oil markets balanced- this statement is at variance with Putin’s so-called Secret agreement with Saudi Arabia to increase output.
This is not the first time such speculation would arise about the duo however, both countries have maintained their stand with the OPEC pact.
If true, Russia’s and Saudi Arabia’s agreement comes at a time when the markets heated up ahead of U.S. sanctions against Iran’s oil sector, starting from Nov. 4- the sanction is expected to reduce around 1.5 million bpd of supply, further tightening the market.
According to the report, the secret pact by the duo, coupled with rising U.S. inventories, have led to oil prices dropping from four-year highs reached the previous session.
Brent crude oil futures LCOc1 were trading at $85.85 per barrel at 0104 GMT, down 44 cents, or 0.5 percent, from their last close.
Brent on Wednesday hit a four-year high of $86.74 a barrel.
OPEC daily basket price stands at $83.28 a barrel, as the U.S. West Texas Intermediate, WTI crude futures CLc1 were down 30 cents, or 0.4 percent, at $76.11 a barrel.
U.S. weekly Midwest refinery utilisation rates dropped to 78.9 percent, their lowest since October 2015, according to data from the report.
Meanwhile, U.S. crude oil production C-OUT-T-EIA remained at a record high of 11.1 million barrels per day (bpd).