Oil jumped more than 5 percent on Monday on talks of concrete action to maintain market stability between Saudi Arabia and Russia. Brent prices jumped to as much as $ 49.38 per barrel, gaining more than 5 per cent, before trading 3.63 per cent higher at $48.63.
West Texas Intermediate also jumped 3.62 per cent to be at $46.02 per barrel. The price reaction comes after Saudi deputy crown prince told Russian President Vladimir Putin on the sidelines of a summit that cooperation between the two countries would bring benefit to the global oil market.
Saudi energy minister Khalid al-Falih will make a "significant announcement" at a news conference at 0930 at the summit.
Saudi Arabia and Russia agreed to work together to stabilise prices, without offering details on joint action, after Deputy Crown Prince Mohammed Bin Salman and President Vladimir Putin met in China on Sunday.
Crude rose the most in two weeks on Friday as Putin said he’d like Opec and Russia to agree to an output freeze. Oil rallied last month amid speculation members of the Organisation of Petroleum Exporting Countries and other producers would agree to a plan to limit output when they meet later this month in Algiers.
A similar proposal, originally put forward in February, was derailed in April after Iran declined to cap its production. Putin said in an interview last week in Vladivostok that other producing countries now recognize Iran should be allowed to continue raising output since it was freed just months ago from international sanctions. The Russian president said at the time that he may recommend such a plan when he met with Prince Mohammed.
Saudi Arabia led Opec’s decision in 2014 not to cut output amid a global glut in order to protect market share and force out higher-cost producers. Group production rose to a record 33.69 million barrels a day in August, just under a third of global demand, a Bloomberg survey showed last week.