Russia says to work with OPEC on oil output cut - report

Russia says to work with OPEC on oil output cut - report
.hurriyet2008-detailbox-newslink { font-family: Arial, Helvetica, sans-serif; font-size:13px; font-weight:bold; text-decoration:none; color:#000000;}.hurriyet2008-detailbox-newslink:hover { font-family: Arial, Helvetica, sans-serif; font-size:13px; font-weight:bold; text-decoration:underline; color:#990000;}Russia's energy minister said the country may coordinate oil production cuts with OPEC to help stem the slide in crude oil prices, media reports said Wednesday.

"Russia will cooperate with OPEC to defend its interest," Russian Energy Minister Sergei Shmatko said at a conference in New Delhi on Tuesday, the Press Trust of India news agency reported.

"We cannot rule out cutting down of production," he said, according to the report. "In OPEC, they are actively discussing measures to protect current market of oil and reduce production."

OPEC member states meet Saturday to discuss lowering production, with oil prices now around a third of the record levels they reached in July. The organization already has made two output cuts totaling two million barrels a day in separate decisions in September and October. Venezuela, OPEC's third-biggest producer, supports a third production cut.

Crude oil rose in New York after Russia's announcement. Crude for January delivery rose as much as 53 cents, or 1 percent, to $51.30 a barrel on the New York Mercantile Exchange.

Shmatko blamed the steep decline in crude oil prices on recessions in major economies and speculation in the oil market.

"Today's oil prices are not determined significantly by traditional parameters of demand and supply but it is under effect of the whole financial crisis and speculation," he said.

Even after OPEC cut oil production by 1.5 million barrels a day last month crude oil prices have fallen to about $50 a barrel — a third of their July peak of nearly $150.

"Many of the budgets of oil producing countries have been balanced based on the oil price band of between $70 to 90 per barrel," Shmatko said, according to PTI. "Russian investment has also been budgeted at $70 per barrel."

Russia asked to broaden its cooperation with OPEC at a meeting in Vienna earlier this year and said during a recent visit to Moscow by OPEC Secretary-General Abdalla Salem El-Badri that it may store some oil to buoy prices.

Shmatko also said that Russia was planning to form a cartel of gas producing countries along with Iran and Qatar, The Times of India newspaper reported. He gave no other details.