Oil prices rally as Saudi-Russian deal “very, very close”

Oil prices rallied in Asia on Tuesday from a dramatic 8%-fall in their last session.

International Brent Oil Futures rose 2.43% to $34.11 by 9:52 PM ET (2:52 AM GMT) and US Crude Oil WTI Futures jumped 4.1% to $27.15.

Russian Direct Investment Fund’s chief executive told CNBC overnight that his country and Saudi Arabia are “very, very close” to an agreement to cut production.

“I think the whole market understands that this deal is important, and it will bring lots of stability, so much important stability to the market, and we are very close,” Kirill Dmitriev, who heads the Russian sovereign wealth fund, added in his interview.

Andrey Kostin, chief executive of VTB Bank, agreed with Dmitriev as he said in a CNBC interview, “Russia is definitely very much interested in stabilizing oil prices and … there’s the political will. No one is interested in low oil prices. Neither the United States nor Russia, nor the Saudis. From this point of view, I think there should be a reasonable agreement achieved at the end of the day.”

But even as OPEC+ members are said to be preparing for a virtual meeting on Thursday, investors are focusing on whether the two producers can reach an agreement on production cuts amid plummeting demand.

“This Saudi-Russia rift, that’s really key to the deal,” Herman Wang, S&P Global (NYSE:SPGI) Platts Middle East and OPEC managing editor, told CNBC.

“Set aside whether the US will participate or not,” he said. “Without Saudi and Russia on the same page, there’s no deal to be had at all.”