Russia balks at raising oil production

Russia has no plans to increase its output of crude oil in the midst of a glut in the market, Russian Energy Minister Alexander Novak said on Thursday against the backdrop of falling prices for the commodity.

International crude prices have plunged around 50 percent to under $26 a barrel since the Organization of the Petroleum Exporting Countries and other large oil producers led by Russia failed last month to agree to extend their deal to curb output.

However, they jumped 10 percent on Thursday after US President Donald Trump said he expected Saudi Arabia and Russia to reach a deal soon to end their oil price war.

Novak said Russia has not yet had discussions with Saudi Arabia on output, but does not rule this out.

Bloomberg quoted a Russian official as saying on Wednesday that Russia is not raising its crude oil production because "it doesn't make sense" for Russian companies to boost output while the market is oversupplied.

Russian restraint stands in contrast to vows by the Saudis to reach record oil exports over the next few months.

The report that Russia is putting on hold any plans for a production boost came days after Russian President Vladimir Putin and Trump discussed the oil market in a telephone call. The US president is concerned that the low prices are threatening the prospects for the high-cost drillers in the US shale industry.

No more gold purchases

Novak and US Energy Secretary Dan Brouillette discussed the market in a call on Tuesday. They agreed to hold more talks involving other major oil producers and consumers.

In order to ease the impact of the low oil prices on the Russian economy and the value of the rouble, the country's central bank had announced it would stop buying gold from April 1.

At present, gold accounts for about 20 percent of Russia's international reserves. The central bank had evidently not wanted to increase the metal's share in the reserves, said Tatiana Evdokimova, an analyst at Nordea Bank, in Moscow.

According to data from the central bank, Russia has spent more than $40 billion building a war chest of bullion over the past five years, making the country the world's largest buyer of gold.

Dmitry Dolgin, ING Bank's chief economist in Russia, said the country may consider selling some gold to take advantage of prices near a seven-year high. Bullion has become an extremely popular investment in recent weeks as the coronavirus sows fear through financial markets, Dolgin said.

Reuters contributed to this story.