Russia cutting oil output

Igor Setchin, Chief Executive of Russia's state-owned oil major Rosneft, announced Tuesday that his company will lower its daily oil production by 25,000 barrels.

Setchin attributed the decision to "current market conditions," which had seen oil prices fall by 30 percent since June this year.

The announcement was made following talks between Russia, Saudi Arabia, Mexico and Venezuela, which failed to find an agreement on how to address a growing oil glut.

After the meeting, crude prices turned even lower, with international benchmark North Sea Brent Crude falling more than $1 (0.80 euro) a barrel to about $78.

OPEC crunch meeting

Two days ahead of a meeting of the Organization of Petroleum Exporting Countries (OPEC) in Vienna on Thursday, Russian and Mexican energy officials rushed to Vienna to push OPEC members to counter the threat of further price falls.

Venezuelan Foreign Minister Rafael Ramirez told reporters after the meeting that while all sides agreed current prices were "not good" for producing countries, no output cuts could be arranged - or guaranteed at Thursday's OPEC meeting.

"We discussed the situation in the market, we shared our points of view, we need to keep in contact and we agreed to meet again in three months," Ramirez said.

Oil market observers are divided on the outcome of OPEC's Thursday meeting in the Austrian capital. Predictions range from a large production cut to revive prices, to a small reduction, or none at all.

Current prices are far below what most OPEC members and rival producers such as Russia need to balance their budgets. Oil producers across the world are struggling to adapt to growing supplies from the US shale boom.

Some analysts say an OPEC cut of as much as 1.5 million barrels per day (bpd) is needed to support oil prices and avoid increasing a supply glut in the first half of 2015.

uhe/bew (AFP, Reuters)