Also on Friday, OPEC is set to approve Indonesia’s return to the organisation following a six-year absence that had been triggered by southeast Asia’s largest economy becoming a net importer of oil.
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Other OPEC countries will be pushing for an decrease in production.
“Nothing is decided, we are still discussing” among ourselves, Iraq’s oil minister Adil Abd Al-Mahdi told reporters after an informal gathering of OPEC members in Vienna.
USA crude CLc1 was trading 42 cents higher at $40.36 per barrel at 0742 GMT, while internationally traded Brent futures LCOc1 were up 58 cents at $43.07.
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. Iran has called on the group to trim production to accommodate its own output increase next year.
Markets 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 ceiling at 30 million barrels at Friday’s meeting.
OPEC made the historic decision to maintained its production levels previous year despite a more than 50 per cent fall in price over the past 18 months.
The world needs to generate around 5 million barrels per day (bpd) new supply a year just to stand still as older fields decline by about 4 million bpd a year and demand grows by 1 million bpd, he said.
Russian Energy Minister Alexander Novak said Thursday that the country doesn’t see a production cut as viable. Instead, the group has increased its output in recent months and now produces above its target of 30 million barrels a day.
The sources said there was little chance of Saudi Arabia making a formal proposal for OPEC output cuts, contingent on co-operation from non-OPEC, as reported by Energy Intelligence.
The report, viewed by many as a kite-flying exercise to gauge the resolve of the main players, failed to convince traders that the Saudis will ditch their oil output policy soon. Saudi Arabia announced Thursday that it will sharply cut the prices for its crude oil to all its customers in January, especially in Europe, intensifying the battle for market share.
Saudi Arabia has been the main driver of OPEC’s current policies to pump record volumes of crude to push higher cost producers, such as newcomers tapping into USA shale, out of the market.
A strong USA dollar, lifted by the prospect of a Federal Reserve rate hike, has kept oil prices weak as it makes greenback-dominated contracts such as crude futures more expensive for those holding other currencies.
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PVM Oil Associates analyst Tamas Varga said the proposal was “only rhetoric”, adding: “Cooperation is the key word here – and that cooperation does not seem to be forthcoming”.
