Both Saudi Arabia and Iraq have seen their output increase by more than 2 million barrels a day since 2010, while Iran’s has fallen by 50,000 barrels a day over the same period.
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Iran’s President Hassan Rouhani earlier said that Iran, the third-largest producer in OPEC, will support any measures aimed at stabilizing the “black gold” market should fair imposition of quotas on output be pursued in the market.
“In a joint press conference after the meeting, HE Zanganeh reiterated his commitment to playing a constructive role in working with fellow Member Country ministers and the OPEC Secretary General to help restore market stability”. The major concern will still be the output levels, a record high.
Iran’s refusal to join a similar plan in April led Saudi Arabia, its chief regional rival, to scuttle the Doha-based talks.
“The market is trying to establish a balance in the mid $40s with supply being relatively high internationally versus the prospect that OPEC and non-OPEC members might come to an agreement that would support markets”, said Tony Headrick, energy analyst at CHS Hedging LLC in St Paul, Minnesota.
On Monday prices surged after Russian Federation, which is not an OPEC member, and Saudi Arabia pledged to cooperate in steadying prices even though officials from the two countries said they saw no need to freeze output. “I hope by the end of 2016 or early next year, we would be able to reach that level”.
Inventory data published Thursday by the U.S. Energy Information Administration is forecast to show an expansion of 905,000 barrels a day, according to a Bloomberg survey.
But remarks from the Saudi oil minister poured cold water on speculation of a widespread oil freeze, with Khalid al-Falih saying it was not something being considered in the immediate future. Mohsen Ghamsari, director for worldwide affairs at state-run National Iranian Oil Co., said in an interview in Singapore Thursday that the benchmark Iran is using for pre-sanctions production is “slightly” above 4 million barrels a day, which may be achieved by the end of 2016 or early next year.
November Brent crude futures edged-up 49 cents to $47.75 a barrel, while the United States crude futures added 46 cents at $45.29 a barrel, Reuters reported.
“If we have an agreement in Algiers it’s very good but if we don’t have an agreement, it’s also good”, he said. Production costs are at about $19.21 a barrel this year, he said, adding that 80 percent of Russia’s output is profitable at a cost of $20 a barrel or more.
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Over the past six months, Saudi Arabia increased its oil output to 10.67 million barrels per day from 10.2 million.
