This comment has faded trader’s optimism over production freeze plans. “We have time to take this kind of decision”, Falih said.
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“Freezing production is one of the preferred possibilities, but it does not have to happen specifically today”. The global benchmark on Monday hit a near one-week high of $49.40 after the Russia-Saudi news.
The latest shenanigans over whether the Organization of the Petroleum Exporting Countries (OPEC) and other major suppliers such as Russian Federation will limit their output has generated heaps of noise, but very little of substance.
While Opec adopted a Saudi-led policy allowing members to raise output to protect market share from higher-cost producers in 2014, Iran’s supplies were constrained until this year.
Rouhani’s comments followed the agreement between Russian Federation and Saudi Arabia, the world’s biggest crude producers, on certain measures to be taken with a view to stabilize the market, tackle weak prices and rein of oversupply.
“This price makes production of oil by OPEC members profitable, economical, and useful, while preventing the rivals from raising their output”, he said.
“Most oil market analysts are very skeptical about the chances of an agreement”, said Mike Wittner, head of oil-market research at Societe Generale SA in NY.
The statement did not offer further details on the proposal.
In internal discussions, the Gulf monarchies say the new production figures demonstrate they are showing goodwill by already curbing their output ahead of the freeze talks.
Earlier in the year, Iran refused to sit down with OPEC ministers in Doha, Qatar, to broker a cap on oil production. However, since both the countries fell short of announcing specific measures to cut back on production, crude prices crashed.
Iran can raise its output to 4 million barrels per day (bpd) in the next two to three months, and is aiming for 5 million bpd in two to three years, Seyed Mohsen Ghamsari, the director for global affairs at the National Iranian Oil Company, said at the Argus Crude Forum in Singapore.
They are Saudi Arabia, Russia, Iran and Iraq.
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“We believe that the market right now is taking too long to balance out. And certainly joint actions which were considered at the beginning of the year, including a freeze, could have drawn much nearer the date of rebalancing of the respective markets”, Novak said on Monday. Saudi Arabia is flooding the market with oil that pushes down the price at the pumps in an effort to counteract the growth of United States and Canadian shale oil. We do not expect a price rally unless OPEC members keep aside their personal interests and work toward easing the market rout.
