Oil prices 'could rise' as Russia considers production cut

26 November 2008

Crude oil prices could be set to start rising again after yesterday's announcement that Russia may consider cutting production cuts along with Opec in a bid to restrict supply.

Victor Shum, senior principal at Purvin and Gertz in Singapore, told Bloomberg: "The slight rise is in line with talk about the coordination between Russia and Opec, but there is still quite a bit of scepticism."

The main reason for this scepticism, he added, is that the industry's only aim in the near future is to see prices consolidate at $50 (£32.44) per barrel.

The announcement to possibly cut production, which has been described as "bullish" by some experts, came from Russian energy minister Sergei Shmatko and follows the country's struggles to meet its output projections.

Meanwhile, home heating oil customers and drivers in the UK may be pleased to hear that prices remain low for the time being.

Brent crude dropped today to $49.95 per barrel and the cost of a barrel of US crude fell to $50.34.

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