The benchmark North American contract, West Texas Intermediate crude, rose $1.63 to $30.67 United States a barrel at mid-afternoon, a 5.6 per cent increase on the day.
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The meeting in Tehran is as a result of a deal reached on Tuesday by OPEC super power, Saudi Arabia and non-OPEC Russia, to freeze production at January levels if other big oil nations agree to join.
Iranian Oil Minister Bijan Zanganeh was due to meet his counterparts from Venezuela, Iraq and Qatar at 1030 GMT in Tehran.
After oil prices rose in the previous session as much 8 percent, commentators suggested markets had overreacted to Iran’s support for the caps and said the Russian-Saudi move would not likely reduce the global surplus.
Saadallah al Fathi, a former adviser to Iraq’s Ministry of Oil and former head of the Energy Studies Department, OPEC Secretariat, told Al Jazeera that freezing output at January’s levels was not going to immediately cut supplies.
‘The market needs a cut, not a production freeze, ‘ according to PVM analyst David Hufton. On December 2015 and while sanctions were still in effect, Iran’s oil exports to Japan surpassed those of Saudi Arabia, Qatar, UAE, Russia, and Kuwait.
Iran should have increased production by 500,000 barrels a day by March 20, the end of the Iranian calendar year, Shana reported on Wednesday, citing Roknoddin Javadi, managing director of National Iranian Oil Co.
“We want to see that Japanese companies working with the government to improve their buying of oil to levels before sanctions had hit Iran’s oil sector”, Mr. Zanganeh said in the meeting.
Investors are also eyeing USA oil inventory data later on Wednesday and on Thursday for further direction on prices, with a poll of analysts forecasting a gain of 3.9 million barrels in crude oil stocks last week.
On Wednesday, the Iranian newspaper Shargh quoted Mehdi Asali, the country’s OPEC envoy, as saying that Iran plans to ramp up production until pre-sanctions levels are attained. For months, as oil prices plunged, Riyadh had refused to curb its production in an attempt to force other oil producers, especially US shale oil producers, out of the market. The country has been freed from these limits for about a month, so it doesn’t really make sense for Iran to yield to the pleas of the four oil producing countries.
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Iran said it would back any measures to stabilize the markets, but avoided committing to capping its own production. Saudi Arabia would be willing to freeze its output if it meant burdening its rival Iran. Oil volatility has been the one constant over the past year or so, and especially more recently, rumors of a production cut have periodically sent prices soaring.
