Oil rises as Russia threatens cuts

26/11/2008

The price of crude has risen today amid concern that Russia will follow the Organisation of the Petroleum Exporting Countries (Opec) in enacting a supply cut.

During trading on the New York Mercantile Exchange this morning (November 26th), light, sweet crude climbed as much as one per cent to $51.30 (£33.34) a barrel.

Such prices could soon impact on the price of heating oil, DERV, bunker fuels and other derivatives.

Crude was supported by a statement made yesterday by Russian energy minister Sergei Shmatko, in which he warned that a supply cut could not be ruled out.

"Russia is being more cooperative like they were about 10 years ago and it would be bullish if they cut output along with Opec," Anthony Nunan, assistant general manager for risk management at Mitsubishi Corp, told Bloomberg.

There is also ongoing speculation that the oil cartel will enact further cuts at its upcoming monthly meeting in Cairo.

Such action could soon impact on crude prices, as well as derivatives such as heating oil, DERV and red diesel.