Putin pushes oil price higher as Russian oil firms agree not to increase output in 2016

 
Billy Bambrough
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Russia has been one of the countries most keen to seal a deal to prop up the oil price after the slump dragged down the price of the rouble (Source: Getty)

The oil price has been sent sharply higher by comments from Russian president Vladimir Putin, promising Russian oil companies will not increase output this year.

The price has soared to highs for 2016, with international benchmark Brent crude trading at $36.83 and West Texas Intermediate going for $34.26 dollars a barrel.

Putin was speaking at a meeting with the country's top oil firms.

Last month Russia, Saudi Arabia, Qatar and Venezuela reached a deal to cap their production at January levels, but only if other countries agreed to do that same.

"As (energy) minister (Alexander Novak) has reported, you all agree with this proposal," Putin said. "The purpose of our meeting, of the meeting today, is for me to personally hear this from you."

Russia and Saudi Arabian production has been hitting record highs in recently as companies try to eke out value from wells following a 70 per cent slump in the price of oil in the past 20 months.

The Russian news agency Interfax reported Putin was keen to hear from the companies, asking:

The aim of today’s meeting is that I would like to hear it from you directly, do you really support the minister’s proposal? What do you think about it?

Analysts have poured scorn on any production freeze however, claiming that it will do little to ease the supply glut that has driven down the price.

Saudi Arabia arch rival Iran has also pledged to continue pumping more oil as it tries to regain lost market share.

Oil experts have also raised concerns that US shale production will not drop off due to the low oil price as was previously expected.

The rise of shale drilling has prompted de facto Opec leader Saudi Arabia to admit it is no longer able to control the global supply flow of oil without the cooperation of non-Opec producers.

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