The "correlation between oil prices and broader market trading is a driving factor and the volatility in both is enough of a reason to take some money off the table", said Tamar Essner, director of energy and utilities at Nasdaq Corporate Solutions. This is the objective of the agreement: "monitor and stabilize", he said.
Oil prices fell on Tuesday after Saudi Arabia pledged to play a "responsible role" in energy markets, although sentiment remained nervous in the run-up to USA sanctions against Iran's crude exports that start next month.
While Saudi Arabia is intent on making up for lost barrels, the outlook for demand next year is deteriorating.
"The big unknown is how much Iranian oil will be off the market and we'll know in about a month's time. So we did our job and more", the crown prince claimed, prompting Zangeneh to dismiss the remarks as "nonsense".
Also, investors have been spooked by the looming threat of a possible supply crunch as the reimposition of United States sanctions against Iran are forecast to take 1 million bbl/d out of the equation by early next year.
On Tuesday, Zangeneh reiterated Iran's position that neither Saudi Arabia nor Russian Federation can replace Iranian oil. "Hopefully more countries will join", he said.
Speaking to Russia's TASS news agency about whether there could be a 1973-style oil embargo on the West, which saw petrol prices rocket after Saudi Arabia slapped countries including the U.S. with a ban, Mr Falih said: "There is no intention".
Saudi Arabia's Energy Minister Khalid Al-Falih was reported by Reuters, with the key headlines found below.
Other OPEC members, meanwhile, had added only 105,000 barrels per day of extra oil in total during the period, which means they are not capable of producing more than current levels, he said. "Therefore, Russia can not increase production further in the short term, without investing in its upstream industries".
West Texas Intermediate for December delivery declined US$2.88 to US$66.48 a barrel at 1:35 p.m. on the New York Mercantile Exchange, slipping below its 200-day moving average for the first time in a year.
He said that if oil prices went up, it would slow the global economy and trigger a recession.
"I cannot give you a guarantee, because I cannot predict what will happen to other suppliers", Falih said, when asked whether the world can avoid oil hitting $100 per barrel again.
Falih's statement showed that longer-term co-operation between OPEC and Russian Federation is on the cards in a bid to keep the market adequately supplied post-Iran sanctions, and to offset any imbalances in supply and demand that could come into play as the USA cranks up production and export volumes.
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