Oil prices rise on hopes of production cuts

28 January 2016 (Last Updated January 28th, 2016 18:30)

Oil prices increased on Friday in anticipation of production cuts by major shale companies, in a bid to reduce the global supply glut.

Oil prices increased on Friday in anticipation of production cuts by major shale companies, in a bid to reduce the global supply glut.

Brent futures increased 18¢ to $34.07 a barrel, while the US crude climbed 26¢ to $33.48 a barrel, Reuters reported.

"While we view this outcome as unlikely, a 5% production cut by just Saudi Arabia and Russia would be sufficient to bring the market close to balance."

Russia's Deputy Prime Minister Arkady Dvorkovich said that output from the country may fall due to a decline in investments, but the country would not interfere to balance the market.

Russian Energy Minister Alexander Novak said that a decision on reducing oil production can be taken only if all countries that export crude agree, and that the country is ready to discuss the issue of cutting oil output volumes.

The news agency quoted global investment firm Jefferies saying in a statement: "While we view this outcome as unlikely, a 5% production cut by just Saudi Arabia and Russia would be sufficient to bring the market close to balance."

During January and February, oil exports from Iran are set to increase more than a fifth from last daily average last year.