Saudi, Russia, Venezuela Meeting in Qatar Prompts Price Rally

Analysts continue to question the efficacy of any plans to cut output.

Last week's oil price rebound that was triggered by what critics dismissed as "false hope" continues this week with news that top Russia, Venezuela, and Saudi Arabia ministers will converge in Doha on Tuesday.

The event is said to be the biggest producer gathering since the Organization of the Petroleum Exporting Countries' (OPEC) formal meeting in December.

Oil prices rose nearly 2 percent on Monday and Brent crude gained over 60 cents after it was learned that Alexander Novak, energy minister for Russia, will join Eulogio Del Pino, oil minister for Venezuela, as well as Ali al-Naimi, oil minister for Saudi Arabia, for discussions.

The agenda of the meeting is not known, but Del Pino has reportedly been trying to gain support from major oil producers to freeze production at current levels in order to halt downward spiralling prices.

Russia's OPEC representative said only that it was discussing output cuts with individual members but not with the cartel itself.

Last week, oil's rebound prompted Michael Cohen, head of energy commodities research for Barclays, to remark that it was based on false hope and too much distrust exists between Saudi Arabia and Russia for any meaningful cuts to be made.

Monday's market rises were accompanied by further skepticism about the efficacy of talks, in the form of a note from Phillip Futures stating that "We continue to believe that if prices were to be artificially supported with production cuts it would only give more expensive forms of production more room to breathe and would only solve the problem in the short term."

In January, John Defterios, emerging markets editor for CNN Money, said OPEC is facing "the worst internal crisis in its 55-year history" due to squabbling over its strategy to quash non-OPEC producers, regardless of the consequences.