Russia supports OPEC plan to limit oil production

Russian President Vladimir Putin said Monday his country is ready to reduce oil production and supports OPEC's initiative to trim production as a way to support oil prices.

Speaking at the World Energy Congress in Istanbul, Putin criticised the surplus of oil and warned that if current tendencies continue, it will lead to lack of financing, deficits and new price fluctuations that will hit both producers and consumers.

Saying that the only right decision to maintain the stability of world energy resources is a freeze or cut in production, Putin said, "Russia is ready to join joint measures on reducing the production of oil and invites other oil exporters to do so."

He added: "We support the recent OPEC initiative to fix limitations on production and hope that at the November OPEC meeting, this idea will be transformed into real agreements giving a positive signal to markets and investors."

Also at the congress, Venezuelan President Nicol·s Maduro said it was necessary to find a new mechanism within six months to stabilise markets. "Petroleum producers, OPEC members should reach an agreement and should work for the stability of the petroleum industry," he said.

Sanctions bad for sector

Putin also criticised unilateral sanctions. "It is inadmissible to curb the development of the energy sector for the sake of political ambitions of certain countries. Such actions do not contribute in any way to the stability of the world energy sector."

Oil jumped to its highest price in more than a year after Russia's government said it supports efforts by OPEC to cut oil production. In late September the nations of OPEC announced a preliminary agreement to trim oil production, but Russia, a major energy producer, isn't a member of OPEC.

Benchmark US crude rose US$1.53, or 3.1 per cent, to US$51.35 a barrel in New York. That was its highest closing price since July 2015. Brent crude, used to price international oils, gained US$1.21, or 2.3 per cent, to US$53.14 a barrel in London.

In other energy trading, wholesale gasolene rose two cents to US$1.50 a gallon. Heating oil rose 3 cents to US$1.61 a gallon. Natural gas gained 8 cents, or 2.6 per cent, to US$3.28 per 1,000 cubic feet.

Also on Monday, at a meeting in Instanbul, Putin and President of Turkey Recep Tayyip Erdogan voiced support for the construction of a gas pipeline from Russia to Turkey, called Turkish Stream, a project that was suspended amid tensions between the two countries. The pipeline would carry Russian natural gas to Turkey and on to European Union countries.

- AP