Oil down 3 percent as optimism over Saudi, Russia deal cools but markets are up

Brent oil fell 3 percent on Tuesday, erasing early gains after top producers Russia and Saudi Arabia dashed expectations of an outright supply cut by agreeing only to freeze output if other big exporters joined them.

Benchmark Brent prices jumped briefly through $35 a barrel after Russia and Saudi Arabia agreed to keep output at January levels, in what could be the first joint OPEC and non-OPEC deal in 15 years.

Qatari energy minister Mohammad bin Saleh al-Sada said the step would help to stabilize the oil market, which has experienced price declines not seen since the early 2000s because of a supply glut.

Brent LCOc1 was down $1 at $32.39 a barrel by 12:47 p.m. EST (1747 GMT), after rising earlier to $35.55.

NBF – Seems likely Saudi Arabia and Russia will cave completely and agree to some oil cuts in the next weeks to months

If the OPEC and Russia can agree to a production freeze then they will next likely move to production cuts in order to stabilize oil prices or move the prices higher.