Oil gains as Russia-OPEC coordination talks support

The US benchmark, West Texas Intermediate (WTI) for delivery in March, rose $1.11 to $31.45 a barrel on the New York Mercantile Exchange, AFP reported.

In London, Brent North Sea crude for March gained $1.30 to settle at $31.80 a barrel.

Iraqi Oil Minister Adel Abdul Mahdi said at a conference in Kuwait that Baghdad was "ready to cooperate" on output cuts to boost prices, but only if non-OPEC producers also did so.

Abdul Mahdi was also quoted by Bloomberg as outlining "flexibility" over output increases between Russia and the Organization of the Petroleum Exporting Countries (OPEC).

Russian state-owned news agency Tass reported that Russian oil company Lukoil had urged the Kremlin to work with OPEC to limit production.

That followed comments Monday from OPEC Secretary-General Abdullah el-Badri calling for OPEC and non-OPEC producers to cooperate to lift prices.

Analysts expressed skepticism that a deal among oil producers was imminent.

"(The) need for a production cut is clear -- as weve been saying for the past 18 months -- but its not yet clear whether Saudi Arabia and its OPEC allies are ready to return to the negotiating table," said Tim Evans, an analyst at Citi Futures.

"And without Saudi, there will be no deal and the market will be left to rebalance naturally as non-OPEC output falls, a process that will be slow and painful." "The usual talk of possible coordinated production cuts with Russia and OPEC is doing the rounds again," added CMC Markets analyst Jasper Lawler. "Any such action seems unlikely with US shale producers likely to use any higher prices as an opportunity to increase their own output."
(Uu.A026)