Oil price climbs as Russia says ready to help OPEC

Oil price climbs as Russia says ready to help OPEC

Marie Wolfrom, Agence France-Presse, London

The price of oil bobbed up above US$21 a barrel on Friday, as Russia finally signaled it was ready to join OPEC in reducing volumes to help put a floor under a market weakened by the global economic downturn.

Brent North Sea crude for December delivery climbed as high as $21.60 a barrel at one point before ebbing back to $21.03 by late afternoon -- up 75 cents on the overnight level.

In New York, light sweet crude December futures swung up 58 cents to $21.75 dollars a barrel.

The sudden spurt coincided with remarks in Moscow indicating that after months of skepticism, Russia was finally coming around to the idea of joining the Organization of Petroleum Exporting Countries (OPEC) in some form of supply restriction.

OPEC itself is expected to slash its own output by as much as 1.5 million barrels from December when energy chiefs meet next Wednesday in Vienna.

But the 11-nation cartel has admitted that its actions alone will not be enough to rescue prices, which earlier this week fell below $19 a barrel for the first time since July 1999. At that point, prices had fallen more than 30 percent in the two months since the terrorist attacks on the United States.

OPEC has tried to form an alliance with rivals such as Russia, Mexico and Norway so that its own output reductions -- it has already cut production by almost 15 percent so far this year -- do not merely result in other producers filling their boots.

Russia has hitherto said that while it is nervous about the impact of low oil prices on its budget, it was not contemplating a cut in output.