A previous OPEC attempt to freeze output collapsed in April largely because of Iran’s refusal to join talks, having just emerged from global sanctions and keen to maximise its oil revenues.
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Around 1230 GMT, US benchmark West Texas Intermediate for delivery in October was down 18 cents at $47.15 a barrel.
Iran wants its pre-sanctions share of the crude oil market, Oil Minister Bijan Zanganeh said today, dampening the prospects of agreement on an output freeze at an OPEC meeting next month. However, the rise in oil exports starting in June 2014 was logical for traders due to costlier Brent crude oil and the USA shale oil revolution.
“Iran will continue cooperating with OPEC members but we expect that the right to revive our market share not to be ignored”, he added.
World oil prices fell on August 26 amid the statement of the Saudi energy minister on the lack of necessity in interventions in “black gold” market.
Oil prices were modestly higher on Friday in a volatile session, as traders reacted to comments from Fed Chair Janet Yellen and reports of missile activity in Saudi Arabia.
The Saudi minister’s comments dampened expectations of a meaningful intervention into the market, which has been dogged by oversupply for more than two years. “Saudi Arabia and Iran are basically in a proxy war and have been in quite a long time”.
The Oil Market Report (OMR) is a monthly IEA publication which provides a view of the state of the global oil market and projections for oil supply and demand 12 to 18 months ahead.
At about 0630 GMT, the U.S. benchmark West Texas Intermediate for October delivery was down 11 cents at $47.22, while North Sea Brent was down 20 cents at $49.47.
“At the end of the day, what is driving the market right now is short covering, being that it’s Friday and the dollar taking a hit”, he said.
OPEC will hold a meeting on the sidelines of IEF in Algeria from September 26-28.
In recent weeks, some of the OPEC producers, once again led by Venezuela have been making renewed attempts for quota system but as the large producers remain engaged in a fight for the market share, a deal is very much unlikely. “They were basically in the penalty box for several years and now that has ended and now they can see flexibility and legroom to conduct their business”, he said, adding that Iran is trying to maximize production.
“When the glut in the market started, Iran’s output and exports were roughly at 2.7 million barrels per day (mbd), and those who disrupted the market balance with increasing their output should take responsibility and cut the production”, Shana quoted him as saying.
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From December 2015 to date, USA crude oil exports have surged by 35.4% to 677,000 barrels per day as of the week ended August 19, 2016.
