Nigeria, Saudi Arabia Strategise On Oil Market Stability

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In December 2016, Saudi Arabia opted to cut production, which boosted prices and stabilised the kingdom's finances and economy but also revived the shale boom and cost it oil-market share. To this end, the group will be contemplating cutting oil output by 1 million barrels of oil per day. "Against this backdrop, the most likely outcome of next week's OPEC meeting is a fudge".

Mr Trump, who wants oil prices to fall, has been politically supportive of Saudi Arabia and put pressure on it to keep.

According to the news report by Bloomberg, after a short respite, the downward slide of the price of crude oil started once again after news broke that there had been an unexpected large increase in American crude oil inventories. That doesn't mean the Kremlin is about to give up its alliance with Saudi Arabia, which extends beyond oil, but it means could drive a hard bargain.

Analysts believe that Russian Federation agreeing to reduce production would be crucial for the OPEC/non-OPEC group to hammer out an agreement to cut. They've been exempt from the group's cuts agreement and are unlikely to welcome a decision to include them in any new cuts, Petromatrix's Jakob said.

Average cost of oil and gas production per barrel changes from country to country according to differences on capital spending, production cost, administrative and transportation cost and gross taxes.

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But in one respect the situation is even more uncomfortable because Saudi Arabia's official foreign reserves are down to just over $500 billion, from nearly $750 billion in June 2014. The energy resources, pooled in vast oil fields, are near the surface of the desert.

In Russia, almost half the cost of production per barrel is gross tax - $8.44 of the total cost of $19.21 per barrel, even though the production cost is $2.98, which is lower than Saudi Arabia's. Trump has backed Saudi Crown Prince Mohammed bin Salman despite calls from many United States politicians to impose stiff sanctions on Riyadh.

He was also reported to have said that Russia's 2019 oil output is expected at the same level as this year but could be adjusted, depending on a deal between OPEC and non-OPEC members. Putin has reflected his comfort at oil prices hovering around $60 per barrel.

Russian President Vladimir Putin, whose country is the world's second biggest oil producer, said on Wednesday he was in touch with OPEC and ready to continue cooperation on supply if needed, but was satisfied with an oil price of $60.

Then came out a report by Reuters that Russian Federation has started to concede that it needs to join a new Saudi-led oil production cut, but is still bargaining with its key OPEC partner over how much, how fast, and for how long it would potentially reduce its oil output.