Saudi Arabia now says it is "not prepared" to cut oil production, days after the world's top exporter announced an agreement with its rival Russia to freeze output at January levels if major rivals follow.  Iran shocked markets saying it supported the move, but the announcement from the Saudis seems to blunt that.

The Saudi comments, as well as rising US stockpiles, stopped a brief attempt at boosting crude oil prices which surged to US$32 per barrel on Thursday before retreating to US$30.77.

"If other producers want to limit or agree to a freeze in terms of additional production that may have an impact on the market but Saudi Arabia is not prepared to cut production," said Saudi Foreign Minister Adel al-Jubeir on Thursday.  "The oil issue will be determined by supply and demand and by market forces. The kingdom of Saudi Arabia will protect its market share and we have said so," he added.

Saudi Arabia boosted production several years ago, in part of support international sanctions against its regional rival Iran.  Despite Iran's return to the international market, Moscow and Riyadh are still pumping oil at near-record levels - and refusing to change that will keep oil prices low.  As the head of commodity markets strategy at BNP Paribas Harry Tchilinguirian aptly pointed out:  "By freezing at the high-water mark, you’re entrenching the surplus," at least until demand expands.