Oil prices were extremely volatile on Wednesday reacting to comments from Iran and Iraq and a surprise climb in official United States oil inventories.
Advertisement
Oil prices fell Wednesday, with fears over a U.S. crude stock build wiping out gains made Tuesday on the back of a report that Iran could participate in a joint production freeze, the Wall Street Journal reported. If confirmed, it could signal a reversal in Iran’s stance, as it had declined to attend the last informal meeting back in April where a production freeze pact was discussed. WTI oil is trading at 46.86 while Brent oil is trading at 2.25% at 49.06.
However, it may attend the upcoming meeting as it has been boosting output after the removal of anti-Tehran sanctions in January and is reaching its pre-sanctions production level.
Iran might delay making a decision until the day before the gathering, a spokesman for the country’s Oil Ministry said, asking not to be identified.
OPEC members will meet on the sidelines of the International Energy Forum (IEF), and will probably revive talks on freezing oil production levels when it meets non-OPEC nations in Algeria, sources say. “We do not expect a production freeze – let alone a production cut – from the OPEC meeting”, it said in a report.
Iran has confirmed on Tuesday its participation in the upcoming OPEC meeting to be held in Algeria on September 62-28, according to Reuters, citing an OPEC source. A two-year long selloff in oil has severely hurt the economies of Venezuela, Iraq and Nigeria.
Advertisement
The price for Brent crude oil has increased about 10 percent since Saudi Arabian Oil Minister Khalid al-Falih said “if there is a need to take any action to help the market rebalance”, ministers meeting next month in Algeria would follow through with agreements. Since the 2014 collapse in oil markets, the group has remained more focused on retaining market share. This week, supplies at the storage facilities at Cushing increased by 417,000 barrels according to the API figures, against a more conservative expected 200,000-barrel build.
