Oil futures rallied on Thursday after unconfirmed reports that the Organization of the Petroleum Exporting Countries and producers outside the cartel will meet in February to discuss a cut to production. Russia's oil minister Alexander Novak said Saudi Arabia has suggested a 5% cut in oil production and that the size of the cuts are currently being discussed, according to Russian news agency Interfax. Crude oil futures jumped to as high as $34.82 immediately after the report, and were up 5.1% at $33.93 a barrel at the latest. Brent jumped 5.2% to $35.70 barrel. Russia and Saudi Arabia are among the world's largest oil producers, and a cut in production from those two could help reduce the supply glut that has sent crude prices tumbling in recent months. Reports that OPEC and Russia would discuss a production cut have already been flourishing and helped futures settle with sizable gains on Wednesday. "A deal would be a sensation considering the strained relations between Russia and Saudi Arabia when it comes to oil cooperation," said Ole Hansen, head of commodity strategy at Saxo Bank. "What it has showed, however, is that the market is starting to contemplate whether a bottom has been found as we have clearly found the pain threshold for two of the worlds biggest producers," he added.
Copyright © 2016 MarketWatch, Inc.
Continue Reading Below