Oil price has climbed by about 3% after Russia and Saudi Arabia reached an agreement to look for ways to stabilize the oil market.
The announcement was made by energy ministers Alexander Novak and Khalid al-Falih.
The price of Brent crude oil rose by $1.28 on the news to $48.11 a barrel.
A statement said the plan was to support the “stability of the oil market… ensuring a stable level of investment in the long term.”
The start of 2016 saw the price of oil fell to its lowest level in nearly 13 years due to a production glut and is still far below the $110 a barrel price recorded just two years ago.
Russian energy minister Alexander Novak said the agreement, which might include attempts to limit oil output, was a “historical moment” between members of OPEC, which is the traditional oil producers’ cartel, and non-members, of which Russia is one.
He said that Russia was willing to join an oil output “freeze”.
His Saudi counterpart Khalid al-Falih told Al Arabiya TV: “Freezing [production levels] is one of the preferred possibilities but it’s not necessary today.
“The market is getting better and we have noticed that prices reflect this [improvement].”
Strategies to keep prices high by limiting production are usually the preserve of OPEC and are often not successful.
However, Russia and Saudi Arabia are the world’s two largest oil producers.
Alexander Novak and Khalid al-Falih will meet again later this month and again in October and November.
The outline agreement, to set up a joint task force, was publicized at a news conference at the G20 summit taking place in the eastern Chinese city of Hangzhou.
The agreement to talk about a deal, despite the lack of detail, was welcomed by two other oil producers.
Kuwait’s acting oil minister Anas al-Saleh: “This dialogue confirms that the main oil producers are watching the oil market… to help achieve stability.”
UAE’s energy minister Suhail al-Mazroui tweeted: “UAE, as an active and responsible member of OPEC will always support any joint efforts which will benefit market stability.”
Oil prices have dropped sharply after a meeting of oil producers in Qatar failed to agree a cap on output.
Brent crude fell 7% at one point, but then recovered slightly to stand down $1.87, or 4.3%, at $41.23 a barrel.
The meeting was attended by most members of oil producers’ group OPEC, including Saudi Arabia, but not Iran.
Saudi Arabia, the world’s biggest exporter, had been prepared to freeze output if all OPEC members had agreed.
However, Iran is continuing to increase output following the lifting of sanctions against it.
“As we’re not going to sign anything, and as we’re not part of the decision to freeze output, we ultimately decided it was not necessary to send a representative,” the Iranian government said.
After hours of talks in Qatar, energy minister Mohammed bin Saleh al-Sada said that the oil producers needed “more time”.
Mohammed bin Saleh al-Sada told reporters after the meeting: “We of course respect [Iran’s] position… The freeze could be more effective definitely if major producers, be it from OPEC members like Iran and others, as well as non-OPEC members, are included in the freeze.”
As well as the fall in Brent, the price of US crude oil fell nearly 7% before recovering some ground to stand $1.88 lower at $38.48 a barrel.
The meeting in Qatar was not formally an OPEC event, though most of the group’s members were represented.
OPEC has been slow to respond to the sharp fall in oil prices, which are still less than half the peak of $115 a barrel seen in June 2014.
Oil prices had risen in recent weeks, largely due to speculation that some major exporters would limit supply.
Oil prices soared as much as 12% on February 12 after new suggestions that OPEC nations were set to cut oil production.
According to the Wall Street Journal, the United Arab Emirates’ energy minister said that OPEC members were ready to reduce output.
Meanwhile, Venezuela’s oil minister said oil-producing nations were on a “very good path” to clinch a deal.
However, traders said sharp falls on February 11 may have triggered some bargain-hunting.
Eulogio Del Pino, the Venezuelan minister, who recently visited Russia and Saudi Arabia as part of a global tour to drum up support among both OPEC and non-OPEC producers, said “we’re on a very, very, very good path” to reducing production.
Brent crude closed up $3.30 at $33.36 a barrel in New York after falling below $30 on February 11.
After sinking to a 12-year low of $26.05 on February 11, US crude settled up 12%, or $3.23, to $29.44 a barrel – its biggest one-day rise since 2009.
Many traders were skeptical about the Journal‘s report, pointing out that Venezuela and Russia had tried in vain earlier this week to stir Saudi Arabia and other major producers into agreeing to output cuts.
However, some believe that prices would rebound sooner or later if production tightened or demand rose.
Commerzbank analysts said: “We expect declining US oil production, in particular, to drive the oil price back up to $50 per barrel by the end of the year.”
Friday’s price rises were also aided by figures from oil services company Baker Hughes, which said that US energy companies cut the number of oil rigs for the eighth consecutive week to the lowest levels since January 2010.
Drillers removed 28 oil rigs, bringing the total rig count down to 439, Baker Hughes said.
The jump in oil prices helped to boost sentiment on stock markets.
Wall Street was trading higher on February 12, with the S&P 500 rising 1.8% and the Dow Jones Industrial Average up close to 2% in late trading.
Oil prices have fallen below $28 a barrel amid fears the lifting of international sanctions on Iran could worsen the existing oversupply problem.
Brent crude, used as an international benchmark, fell as low as $27.67 a barrel, its lowest since 2003, before recovering slightly to trade at $28.17.
The price of US crude fell below $29 a barrel to $28.86.
The lifting of the Iran sanctions mean half a million barrels more oil per day could be produced, say analysts.
The decision to lift the sanctions against Iran came on January 17 after the international nuclear watchdog, the IAEA, said Iran had complied with a deal designed to prevent it developing nuclear weapons.
Iran has the fourth largest proven oil reserves in the world, according to the US Energy Information Agency and any additional oil would add to the one million barrels a day of over-supply that has led to a more than 70% collapse in oil prices since the middle of 2014.
Analysts said Iran already had quite a lot of oil ready to sell.
The drop in the price of oil has been driven by oversupply, mainly due to US shale oil flooding the market.
At the same time, demand has fallen because of a slowdown in economic growth in China and Europe.
Historically, OPEC has cut production to support prices. But led by Saudi Arabia, by far the group’s most powerful member, the group has resolutely refused to trim supply this time.
Analysts expect supply to continue to outstrip demand over the next two years, which would keep prices low.
Oil prices have reached a four-and-a-half month high on April 27 amid concerns over disruption to supplies from the Middle East.
Brent crude oil is at $65.37 per barrel and has gained around $9 since last month.
A slowdown in US shale oil production and the conflict in Yemen have been cited as the main reasons for the rise in the oil price in recent weeks.
It comes as BP, Shell and Exxon Mobil are expected to report sharp falls in Q1 2015 earnings this week.
Michael Hewson, chief market analyst at CMC Markets, said: “Overall we are in an upwards trend and we do appear to have found a short-term base. There’s a good chance we could see $70 a barrel [for Brent] over the course of the next month or so.”
While Yemen itself is not among the biggest oil producers in the Middle East, Gulf producers ship oil along the Gulf of Aden on Yemen’s southern coast and through the narrow straits of Bab el-Mandeb, between Yemen and Djibouti.
As a result fighting in the region could create log jams in delivery.
Oil prices will rise further, say industry leaders at the World Economic Forum on East Asia in Indonesia.
Industry leaders at the meeting in Jakarta said the long-term view was that demand for oil is growing.
Oil prices are around their highest levels for 2015.
The price of Brent crude was at $63 a barrel on April 21, up 40% from its January low of $45 a barrel and near its high for the year of $65.
Oil prices more than halved in the second half of last year, as falling demand and high levels of output caused a glut in supply.
Melody Boone Meyer, president of Asia-Pacific exploration and production at US energy giant Chevron, said that dramatic falls were not an uncommon feature of the oil market.
“The price of oil in the last 30 years has fallen five times by 50%,” Melody Boone Meyer said at the forum.
“There’s a surplus of supply right now, and inevitably the decline will occur.”
It was important to continue with projects that were in development, Melody Boone Meyer added, emphasising that Chevron had a lot of projects that are well supported at these price levels.
Shahril Shamsuddin, group chief executive at Malaysia’s SapuraKencana Petroleum, backed that view: “The light at the end of the tunnel is that, in the long term, demand is growing and over the next two to three years we will see prices come to an optimum level.”
Handry Satriago, the CEO of GE Indonesia, said that a lot of its customers in the country were delaying projects because of the slump in prices.
“Since last year we experienced some delay, but last year was because of the political situation of the country,” he said.
“We were having the election, and a new government, but now that delay has became more delayed due to the current situation.”
The company has been trying to work with partners to “keep projects warm” and not to cancel them.
“We show our commitment to them [oil partners], that we are here and we continue to support and work together,” Handry Satriago said.
“We also lobby to the government to make sure that the project can continue.”
With Asia expected to become a net importer of oil in the next decade as consumption booms, government officials said it was necessary to secure energy supplies, even with falling prices.
Indonesia, the world’s fourth most populous country, lost its position as South East Asia’s sole nation in the Organization of Petroleum Exporting Countries (OPEC) in 2008 after it became a net oil importer.
Oil prices rose by almost 6% after Saudi Arabia and its allies launched air strikes on Houthi rebel targets in Yemen.
Saudi Arabia is the world’s biggest crude exporter.
The move has raised concerns that the conflict could spread in the oil-rich Middle East and possibly disrupt supplies from the region.
West Texas Intermediate crude futures, the US benchmark, rallied to about $51 a barrel before falling back.
Brent crude climbed to $59.71 a barrel, but has since dipped to $56.50.
Pressure on the oil price eased slightly as it became clear there was no immediate threat to Middle East oil shipments. However, fears remain that Iran could be drawn into the conflict.
Yemen is located along an important international shipping route for global energy producers. But the country is sliding towards civil war.
Houthi rebels receiving support from Iran have marched on the southern Yemeni port city of Aden, where Yemen’s President Abdrabbuh Mansour Hadi took refuge after he was forced him to flee the capital, Sanaa.
Saudi Arabia, supported by regional allies the United Arab Emirates, Bahrain, Qatar and Kuwait, launched airstrikes on Thursday aimed at halting the rebel advance.
Iran and Saudi Arabia are both members of the Organization of Petroleum Exporting Countries (OPEC), the group that produces about 40% of the world’s oil. Oil exports to Europe pass through the narrow Red Sea strait between the port of Aden and Djibouti.
However, the current glut in global oil stocks, built up in part thanks to US shale production and plentiful output from Russia and other producers, means there is unlikely to be an acute crisis in supply.
The US oil price has dropped below $50 a barrel for the first time since April 2009.
The price of Brent crude also fell on January 5, dipping more than 6% to trade at below $53 a barrel.
The price of both Brent crude and US oil, known as West Texas Intermediate crude, have now lost more than half of their value since mid-2014.
Investors are worried that combination of a global supply glut and weak demand could cause prices to tumble further.
US oil production has soared recently, as fracking – or the process of extracting oil from shale rock by injecting fluids into the ground – has revolutionized oil production in the country, transforming states such as North Dakota and Pennsylvania in the process.
However, the increase in production has come just as economies across the world – from Europe to China – have slowed their once voracious demand for oil.
This, combined with OPEC’s decision to continue extracting oil at its current pace, has left many investors worried.
That has in turn led shares of many of the world’s leading energy firms, from BP to Exxon Mobil, to decline sharply over the past few months.