© Reuters. Bullish Russian energy minister comments boost oil prices

Investing.com - Oil prices spiked 6% to approach the $36-level in North America trade on Thursday, after comments made by Russia’s energy minister fueled speculation of possible joint action with OPEC producers to cut output and alleviate a global supply glut.

Russian energy minister Alexander Novak said Saudi Arabia proposed to cut oil production by each country by up to 5%, sparking a sharp rally in prices.

On the ICE Futures Exchange in London, for April delivery soared $2.15, or 6.34%, to trade at $36.08 a barrel by 14:15GMT, or 9:15AM ET. It earlier rose to $36.10, the most since January 6.

On Wednesday, London-traded Brent prices rallied $1.36, or 4.18%, after Russia said it was discussing the possibility of cooperation with OPEC to tackle one of the biggest supply gluts in decades.

Futures sank to $27.10 on January 20, a level not seen since October 2003 as lingering concerns over the global economic outlook added to the view that a supply glut may stick around for much longer than anticipated.

Global crude production is outpacing demand following a boom in U.S. shale oil and after a decision by the Organization of the Petroleum Exporting Countries last year not to cut production in order to defend market share.

Oversupply issue will be exacerbated further as Iran returns to the global oil market after western-imposed sanctions were lifted earlier this month.

Elsewhere, for delivery in March on the New York Mercantile Exchange climbed to a daily peak of $34.30, a level not seen since January 8, before falling back to $34.22, up $1.92, or 5.93%.

A day earlier, Nymex prices jumped 85 cents, or 2.7%, after weekly supply data from the U.S. Energy Information Administration showed an increase in short-term demand.

U.S. oil futures plunged below $27 last week for the first time since September 2003, as ongoing concerns over a global supply glut and slowing demand dragged down prices.