Major oil producers haggle over production cut

Major oil producers are meeting in Vienna on Friday for a second day of talks aimed at bridging differences over a planned production cut that is meant to stop a recent price drop.

The 25 countries that account for nearly half of global oil supplies have so far failed to reach an agreement as industry heavyweights Saudi Arabia and Russia haggle over how much of an output reduction they are willing to shoulder.

Saudi Arabia is the biggest producer among the 15 members of the Organization of the Petroleum Exporting Countries (OPEC), while Russia leads a group of 10 additional countries that are coordinating their market strategy with the Vienna-based cartel.

Together, the so-called OPEC-plus group is seeking for ways to reduce unusually high global levels of oil reserves, as a way to boost prices that have dropped some 30 per cent since early October.

Markets are oversupplied because countries such as Saudi Arabia and Russia increased output in anticipation of the US oil embargo against Iran that came into effect in November.

The embargo turned out to be less strict than expected, with Washington granting exemptions to some Iran's oil customers, including China and Japan. US oil production has also risen in the past year.

The 25 OPEC-plus countries are mulling a cut of some 1 million bpd, which would reduce global supplies by about 1 per cent.

The benchmark price for North Sea Brent oil traded at 60.28 dollars a barrel Thursday morning, 0.22 dollars above the previous day.