Oil edged up above $34 a barrel on Friday, a gain of some 25 per cent from the 12-year lows seen earlier in January, on hopes that a deal between major exporters to cut production could help reduce one of the worst oil gluts in history.

 

Brent futures have jumped by around a quarter since hitting an intra-day low of $27.10 a barrel on January 20. It hit a high on Thursday of $35.84.

 

Brent was up 40 cents to $34.29 a barrel by 1300 GMT on Friday, after gaining 79 cents, or 2.4 per cent, on Thursday.

 

US crude was up 43 cents to $33.65 a barrel, having settled up 92 cents, or 2.9 per cent, at $33.22 on Thursday.

 

Non-Opec Russia said this week it could co-operate with Opec on production curbs, something it had been refusing to do for 15 years since the ill-fated agreement with Opec in 2001.

 

On Friday, Moscow sent confusing signals as Deputy Prime Minister Arkady Dvorkovich said Russian output could decline as a result of lower investment, but the state would not intervene to balance the market.

 

That appeared to pour cold water on possible joint Opec and non-Opec production cuts mentioned by Russian Energy Minister Alexander Novak on Thursday.

 

However many analysts think there is still a chance of a deal.

 

"As the headlines fly it is difficult to be absolutely sure about each word used but we don't read 'no meeting scheduled yet' the same as 'no meeting scheduled'," Olivier Jakob, analyst at Petromatrix in Zug, Switzerland said.

 

"The 'yet' is not necessarily a 'nyet' and we can therefore continue to speculate about a possible meeting."

 

"While we view this outcome as unlikely, a five per cent production cut by just Saudi Arabia and Russia would be sufficient to bring the market close to balance," Jefferies said in a research note on Friday, referring to Russia's comment.

 

Figures from Iran underlined the fact that there is no end in sight to the glut in the market unless there is a cut in production by major exporters.

 

Iran's oil exports are set to rise more than a fifth in January and February from last year's daily average, data from a source with knowledge of its loading schedules shows, revealing how Tehran is ramping up sales after the lifting of sanctions.

 

"If Opec proposes to Russia production limits that do not undermine Russia's long-term objectives, and key Russian producers back the deal, Russia may indeed agree to production limits," said analysts from US based ESAI Energy. - Reuters