However, the energy ministers will create a joint working group that will follow the oil market indicators and present recommendations on what to do to stabilize the sector.
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Still, on Wednesday, the director for global affairs at state-run National Iranian Oil Co., Mohsen Ghamsari, said that Iran would be ready to decide on capping production only after its output hit pre-sanctions levels, which would amount to just over 4 million barrels a day, according to Bloomberg. “The lack of swing suppliers calls for more”, said veteran OPEC watcher Jamie Webster.
The U.S. Energy Information Administration said in its weekly report that crude oil inventories fell by 14.51 million barrels in the week ended September 2. Oil prices hit their lowest level, falling to $27.67 a barrel at one point, in almost 13 years early this year after nosediving from as high as $115 a barrel two years ago.
A new agreement between Saudi Arabia and Russian Federation provided some short-term optimism for the oil market that the world’s largest producers could cooperate to shore up global crude prices.
If production is stabilized at early-2015 levels, it would effectively mean a cut as most producers – including Saudi Arabia, Russia, Iraq and Iran – have ramped up output since then.
“There will be a steady growth in production and exports next year”, Falah Alamri, the head of Iraq’s State Oil Marketing Co (Somo) told Reuters in Singapore, adding “it was not clear by how much”.
Oil rose on Wednesday to pare some of the previous day’s losses, partly thanks to a weaker US dollar, but the limited likelihood of a near-term agreement among the world’s biggest exporters to rein in production kept gains in check. For now, most of the representatives of the global expert community seriously doubt that the summit participants will end up being positive on those production cuts. Imports into the US Gulf dropped by a whopping 760,000 barrels per day on the prior week, while imports to PADDs 1, 3 and 5 dropped by a whoppingly whopping 1.87mn bpd.
But traders are still sceptical on whether a deal can be reached after earlier efforts this year were scuppered by Iran who refused to agree to any deal as it emerged from years of nuclear-linked Western sanctions. Only Iran and potentially Iraq could raise output in the medium term.
The source also said that Algerian authority has already got a consent of Iranian side on the issue of setting oil prices at the level of $50-60 per barrel.
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Iran has said it’s too soon to cap its output as the nation bids to regain its pre-sanctions share of OPEC production, while Nigeria and Libya are looking to pump more barrels after political turmoil and violence disabled pipelines, ports and other oil infrastructure.
