UPDATE 12:25 p.m. EST: Saudi officials denied proposing a 5 percent cut in oil production, and OPEC delegates said they have no meeting planned with Russia to discuss changes in oil output, Bloomberg reported. Russian Energy Minister Alexander Novak had told reporters Thursday that Saudi Arabia was floating a proposal to trim crude production from all oil-exporting nations. He said Russia would be willing to discuss output with OPEC in a possible February meeting.

"It’s possible that Russia could be testing the waters to gauge how OPEC members would respond to the idea of cuts," Jason Bordoff, director of the Center on Global Energy Policy at Columbia University and a former senior oil official at the White House, told Bloomberg.

Original story:

Oil prices hit a three-week high Thursday on the news that Saudi Arabia and other major producers may cooperate to cut production. Russia’s energy minister said Saudi officials had proposed for all oil-producing countries to trim production by up to 5 percent to boost the price of crude, which sunk to a 12-year low this month, Reuters reported.

Russian Energy Minister Alexander Novak told reporters that oil ministers from OPEC and non-OPEC nations may meet in February to discuss the possibility of production cuts. A group of OPEC members, including Nigeria and Venezuela, have also pushed for their own emergency meeting ahead of the cartel’s June 2 gathering in Vienna as plunging oil prices erode state revenues.

Brent crude, the global oil-price gauge, gained 6.2 percent in New York to $35.15 a barrel by 9:26 a.m. EST, after dipping as low as $27.10 a barrel last week.

Oil prices have halved since May on fears of a growing supply glut. OPEC has estimated a global oversupply of around 2 million barrels per day -- the result of both surging production in non-OPEC nations, including the United States, and the gloomy economic outlook in China and other developing nations.

Until this week, the biggest producers gave little indication they were willing to slash production for the sake of shoring up oil prices. OPEC abandoned its output target on Dec. 4 at a meeting, and Saudi Arabia has long resisted calls from other OPEC members to scale back output, which reached record levels last year.

Khalid al-Falih, who chairs the board of state-owned oil giant Saudi Aramco, said last week the Saudis would only consider a production cut if other countries followed suit. He argued it was unfair for Saudi Arabia to cede market share to U.S. shale oil drillers and other competitors to benefit other countries’ economies.

“Saudi Arabia has really never advocated that it would take the role of balancing the market,” he said during a Jan. 21 panel discussion at the World Economic Forum in Davos, Switzerland. “If there are short-term adjustments that need to be made and other producers are willing to collaborate, then Saudi Arabia is willing to collaborate.”

He added, “Saudi Arabia will not accept the role of by itself balancing the structural imbalance that is happening today.”

Energy analysts said Thursday the proposed production cut would help shrink some of the global supply glut.

"It looks more and more like this is the first sign of surrender in the global production war," Phil Flynn, a senior market analyst at Price Futures Group in Chicago, told Bloomberg. "With capital expenditure slashed and energy projects killed a 5 percent cut would get the market in balance."