Energy, Industry and Mineral Resources Minister Khalid Al-Falih

Oil prices rallied on Monday by up to five percent after Saudi Arabia and Russia vowed to stabilize the market.

Energy, Industry and Mineral Resources Minister Khalid Al-Falih and his Russian counterpart Alexander Novak declared they had agreed to “act together” to steady the market, on the sidelines of a G20 meeting in China.

In reaction, Brent North Sea crude leapt as high as $49.40 a barrel. US benchmark West Texas Intermediate (WTI) soared to $46.53, AFP reported.

Prices later pulled back as Saudi Arabia ruled out the need to trim back production. Saudi Arabia and Russia “noted the particular importance of constructive dialogue and close cooperation between the largest oil-producing countries with the goal of supporting the stability of the oil market,” the ministers said in a joint statement.

“To this end the ministers agreed to act together or in cooperation with other oil producers,” the statement said, adding they had agreed to set up a “joint monitoring group” to offer recommendations aimed at preventing price fluctuations.

Novak described the announcement as marking a “new era” in cooperation between Russia and Saudi Arabia and insisted that it would have a “critical significance” for oil markets, Interfax reported.

After meeting Novak, Al-Falih told Al-Arabiya channel there was “currently no need to freeze production.”

He said: “A freeze is one of the preferred options but it is not needed for the moment.”

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