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Oil Prices Rise, Then Fall Back, On Saudi-Russia Vow To Cooperate On Market Stability

An agreement between Russia and Saudi Arabia to work together to return stability to the global oil market has sent oil prices briefly upward, though they later pulled back again.

Oil prices rose in Asia on September 6 in the wake of the announcement by the two energy powers during the G20 summit in China a day earlier, moving by as much as 5 percent upward to $49.40

But prices later retreated again as Saudi Arabia ruled out any need to trim back production and oil traders questioned whether Riyadh and Moscow would curb global oversupply.

Saudi Arabia and Russia agreed on September 5 on the sidelines of the G20 summit to set up a task force to review oil-market fundamentals and to recommend measures and actions that would secure market stability.

Saudi Energy Minister Khalid al-Falih and his Russian counterpart, Aleksandr Novak, said they agreed to "act together" in what Novak called a "new era" of cooperation between Russia and the Saudi-led OPEC cartel that would have "critical significance."

However, there were no details on any deal to freeze oil output around current levels and Novak later told Al-Arabiya television that doing so won't be necessary at this time.

Russia is due to meet with OPEC in Algeria later this month.

OPEC members Kuwait, Nigeria, and the United Arab Emirates all welcomed the Saudi-Russian pledge.

Iran said on September 6 it supported "any decision" to stabilize the global oil market and that $50-$60 per barrel is the desired price for most OPEC members.

Based on reporting by AFP and TASS