United States crude prices were hovering above $40 on Thursday, after falling more than 4% a day earlier on an unexpected rise in stockpiles, while Brent was weighed down by the concern that the Organisation of the Petroleum Exporting Countries (Opec) will keep its output ceiling unchanged.
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Energy Intelligence newsletter reported on Thursday Saudi Arabia was considering proposing OPEC cuts output by 1 million barrels per day under challenging conditions such as OPEC members Iran and Iraq limiting output growth as well as the involvement of non-OPEC producers.
OPEC members are expected to hold a series of informal sit-downs among its members today to refine their positions heading into the group’s formal meeting on Friday.
Analysts expect Opec – whose 12 member nations from the Middle East, Africa and Latin America pump out about one third of the world’s oil – to leave its daily oil output target at 30 million barrels.
“Iran, Iraq, Libya and several of the other Opec members are going to increase production substantially during the coming years”, Schieldrop, Oslo-based chief commodities analyst at SEB, said.
“I will be talking with Iran’s oil minister on that so that we can stabilize the price”, Kachikwu said.
Oil market investors widely expected OPEC to maintain its strategy of keeping output high in an attempt to defend market share.
Emmanuel Kachikwu, Nigeria’s Junior Oil Minister, says he will talk to Iran’s oil minister in an effort to stabilise oil prices.
The Opec delegate said agreeing cuts before Iran is producing to its full capabilities would “not work”, with Tehran estimating it can raise output by 500,000 to 1m b/d next year.
The comments from Iranian oil minister Bijan Zangeneh come as OPEC is meeting on Friday in Vienna amid predictions of another year of painfully low prices because of a worsening global glut.
WTI (CLc1) finished the session down $1.91, or 4.6 percent, at $39.94, before returning to above $40 in post-settlement.
Energy consultancy Wood MacKenzie has warned that around $1.5 trillion-worth of oil projects and large undeveloped areas of U.S. shale will be loss-making at prices below $50.
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Brent crude oil prices lost 2 percent from the previous session to sell for $43.53 per barrel at the start of trading Wednesday in NY.
