Oil has steadied above $33 per barrel, well above the 12 year low set earlier in the month. As David Pollard reports, it follows Russia's apparent decision to talk to Saudi Arabia and other OPEC countries about output cuts to bolster oil prices.
It's been the first piece of good news for oil markets in months. Russia's ready to talk production cuts with OPEC, it says - and that's sparked a rare surge in prices - up 5% on the news. But as day breaks here over the Kogalym oil field, any thoughts of a new dawn of collaboration may be premature. Moscow-based oil analyst Andrey Polischuk. (SOUNDBITE) (English) OIL AND GAS ANALYST AT RAIFFEISEN BANK, ANDREY POLISCHUK, SAYING: "Russian oil and gas companies .... some of them plan to maintain the current level of production, while some, part of them plan to increase it. So in my opinion, you should expect a minor increase in total output." Russia appears, if anything, to be bracing for lower prices to come. Its economy slumped 3.8 per cent last year - President Putin is currently chairing talks on a 22 billion dollar rescue plan. Nandini Ramakrishnan from JP Morgan Asset Management. SOUNDBITE: Nandini Ramakrishnan, Global Market Strategist, JP Morgan Asset Management, saying (English): "For them to make adjustments, fix their budget, think about government spending as well as aid to some of these flailing sectors is not surprising. They're going on a longer road now of figuring out adjusting to this lower oil price." OPEC's dominant voice, Saudi Arabia, is making its own adjustments to falling oil revenues. 14 per cent lopped off government spending in this year's budget. At around 10 million barrels per day, it produces about the same amount as Russia. But its deep coffers mean much less pressure to act. World First's Jeremy Cook. SOUNDBITE (English) CHIEF ECONOMIST, WORLD FIRST, JEREMY COOK, SAYING: "We may need to see another leg lower, down into the low twenties, maybe even into the teens, in crude oil prices before these countries, these suppliers, get their act together and say 'enough is enough'." Iran is seen adding another million barrels a day to supply by year end. Its latest word on the outlook: prices won't stay low for long, according to President Rouhani. But how long is another question.