There is speculation that OPEC and other producers led by Russian Federation will agree to output curbs at the meeting. The US energy department said on Wednesday that American crude oil inventories soared 2.5 million barrels last week, indicating poor demand.
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But he added that a “freeze signifies that everybody is content with where the market is today and they want it to be trending in that direction”.
With the oil markets already jittery, some market participants said they believe bearish data from the world’s two largest oil-consuming countries could provide a serious headwind for prices moving into next week. OPEC as a whole has boosted output to record levels since adopting a Saudi-led decision in 2014 to protect the group’s global market share by forcing out higher-cost producers.
Brent crude futures were down 6 cents at $49.61 per barrel by 1339 GMT, having recovered from a session low at $49.12. United States light crude oil was down 5 cents at $46.72 a barrel, after dropping 2.8 per cent on Wednesday.
His reported comments come ahead of an informal meeting of the Organization of the Petroleum Exporting Countries late next month, during which major oil producers are expected to discuss a potential production freeze. Prices are down 2.4 per cent this week.
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. Production has now reached the levels of 3.85 million barrels per day, but it is still lower than pre-sanction level, which was above 4 million barrels.
This follows Iran’s recent effort to integrate joint action, which has slightly raised hopes of the feasibility of a production freeze. “Iran’s oil exports were less than one million bpd”, Zanganeh said.
A previous OPEC attempt to freeze output collapsed in April largely because of Iran’s refusal to join, having just emerged from worldwide sanctions and keen to maximise its oil revenues.
However, prices have taken a beating this week on concerns about prospects for success at the September meeting in Algiers.
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Iran has steadfastly refused to consider any policy that would detract from its meteoric return to the global market, but now that the Islamic republic is approaching pre-sanction levels of output and export, there is worry that its shaky economy and other factors will stall a complete comeback. Al-Falih did not say whether there was a specific level of output that would be necessary to stabilize the market.
