The price of oil has risen over the past few weeks on optimism that a recent OPEC agreement would support a higher oil price. However, the Wall Street Journal reported on Friday that Russia's energy minister Alexander Novak put a damper on the agreement.
Russia, a non-OPEC member, is a major energy producer so any OPEC deal would require its support. OPEC's agreement, which was forged in Algiers last week, called for an oil output reduction of 200,000 to 700,000 barrels a day.
Related Link: With OPEC's Cut, Is It Time To Buy Oil?
The country's energy minister is scheduled to meet OPEC's Secretary-General Mohammed Senusi Barkindo next week at an energy summit in Istanbul. But these talks will merely be "consultations," and the Wall Street Journal suggested that the use of this term is enough to put a hold on the oil price rally.
"This is what happens when headlines are moving the market instead of fundamentals," the Wall Street Journal quoted Olivier Jakob, a researcher at Petromatrix, as saying. "Russia is being cautious and will not make any decision until it is clear OPEC is taking proper action."
Despite the cautious report, the price of oil remains above $50 a barrel although Hurricane Matthew represents a threat to oil supply and demand.
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