The beneficiaries of Monday's rally included Gazprom and Rosneft, which posted gains on the MICEX of 6.2 percent and 5 percent, respectively. Gazprom Neft surged 7.4 percent, while independent producers LUKoil and Surgutneftegaz posted similar gains of 5.7 percent and 6.3 percent.
Abdullah al-Badri, secretary general of the Organization of the Petroleum Exporting Countries, is expected to arrive in Moscow on Tuesday for two days of talks ahead of the group's extraordinary meeting in Vienna on Friday.
But Energy Minister Sergei Shmatko said Monday that Russia would not discuss coordinated oil production cuts with the visiting OPEC secretary. "We will not talk about this. We have a different topic to discuss. We will discuss the situation on the market. But for us, the main thing is the format for cooperation," Shmatko said, Reuters reported.
He did not rule out a meeting with representatives of OPEC countries later on, however.
A decline in production on the part of other producers could be a major boost for Russia, which based its 2008 budget on an oil price of $70 per barrel and planned significant social spending before the end of the year. Prices for crude have tumbled more than 50 percent since July, with spot prices for the country's Urals export blend down to $66.52 per barrel Monday.
Despite the possible production cuts, the prices of Urals for delivery in November fell 4.92 percent to $69.02, in anticipation of the continuing global economic slowdown.
The RTS Index, which finished the day up 5 percent, has lost almost 70 percent of its value since the beginning of the year and was down 21 percent last week on fears that falling oil prices would trigger slower growth and weaken corporate earnings. The MICEX Index was up 4.5 percent.
Although not a member of the organization, Russia and OPEC jointly account for more than 50 percent of the world's oil production.
Chakin Khelil, the president of OPEC, said that although the group normally had no target range, it could not afford to see prices fall below $70 to $90 per barrel, Reuters reported. Any cuts in output will be gradual, he said.
OPEC's ministers called the extraordinary meeting because many member countries will struggle to balance their budgets if oil prices continue dropping. On Sunday, Venezuelan President Hugo Chavez said he would like to see prices at $80 to $90. Saudi Arabia may be responsible for a large share of any cuts, as it had the largest production increases this year, but all other members will be expected to cooperate.
A Message from The Moscow Times:
Dear readers,
We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."
These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.
We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.
Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.
By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.
Remind me later.