Oil held gains as Saudi Arabia’s energy minister said an output freeze would be “positive” if it happens, while ruling out a production cut.
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Oil eased on Friday, on course for its largest weekly decline in a month after the Saudi energy minister watered down expectations that the world’s largest producers might agree next month to limit their output.
“We don’t believe any significant intervention in the market is necessary other than to allow the forces of supply and demand to do the work for us”, he said in an interview following a speech at the US-Saudi Arabian Business Council in Los Angeles. Investors are looking toward a speech by Federal Reserve Chair Janet Yellen for clues on the timing of US interest-rate gains.
No sooner did prices drop on Wednesday than they climbed again – albeit modestly, by 1 percent – on Thursday with the news that Bijan Namdar Zanganeh, oil minister for Iran, will participate in the Organization of the Petroleum Exporting Countries’ (OPEC) informal freeze talks in Algeria next month.
Sal Umek, senior analyst at the Energy Management Institute in NY, said he did not see much effect on the market from the Saudi Arabia reports. Total volume traded was about 68 per cent below the 100-day average.
Brent crude oil futures were down 52 cents at $49.15 per barrel by 0917 GMT, while U.S. West Texas Intermediate (WTI) crude was down 28 cents at $47.05 a barrel. Prices are down 2.7 per cent this week.
Iranian Oil Minister Bijan Zanganeh on Friday said his country wanted its pre-sanctions share of the crude market, in comments that suggested Tehran might not be on board with efforts in the OPEC cartel to agree on an output cap together with Russian Federation.
The price of the OPEC basket of 13 crudes closed at $45.28 a barrel on Thursday.
Al-Falih said no specific production level for a freeze has been broached yet.
A previous attempt to freeze output at January levels to support prices collapsed in April after Saudi Arabia said it wanted all producers, including Iran, to join the initiative.
Mentioning his presence in the gathering of OPEC members in Algeria next month the official noted that Iran is only seeking to regain the market share it lost due to the sanctions.
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“Iran will continue cooperating with OPEC members but we expect that the right to revive our market share not to be ignored”, he added. Oil suppliers want a deal to manage production, Opec’s secretary general Mohammed Barkindo told Arabic-language newspaper Al-Hayat.
