Earlier in the week the United States government reported another decline in domestic crude output to barely above 9 million barrels a day after peaking at about 9.7 million barrels a day a year ago. Only a production cut could do that.
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Crude has rebounded after reaching an nearly 13-year low this year on signs a global glut will ease amid speculation over whether an accord to cap output can be reached.
Naturally, some such projects are even more unlikely than Iran’s oil projections, but if Iran and its partners implement a major portion of their recent plans it could create additional difficulties for the Saudis and other adversaries who are now feeling threatened by the growth of Iran’s economic and political influence. Anything Iran can do to reduce oil income for the Saudis will add to the financial pain of the kingdom’s efforts at regime change.
As March wound down, the futility of a freeze started sinking in, and crude futures let out some of the steam.
Bearish sentiment was further reflected in price expectations.
Russian Federation has not discussed the issue on Iran’s participation in freezing oil production with Saudi Arabia either but it is ready to talk on the matter, Novak told to RIA Novosti. Venezuela, he said, hopes the freeze will be enough to “achieve an equilibrium price”.
They also recommended that oil producers in general “take production decisions based on public information from the global market” in light of “the need to balance crude output and demand to reach an equilibrium price”, according to the communique, read by Ecuador’s foreign minister, Guillaume Long.
Suffering more than most producers from the 60-percent plummet in oil prices since mid-2014, leftist-ruled Venezuela and Ecuador have pushed hard for the meeting in Doha. However, long-time rival to Iran, Saudi Arabia have been calling for freeze at January production levels after prices hit a 13-year low earlier this year. However, compliance with output reduction deals both within and outside the organisation has been poor historically. At present, it is at the level of 3.1 million barrels, according to the data provided OPEC.
Brent was lifted by production outages in the North Sea and West Africa, as well as by hopes that a meeting of exporters planned for April 17 would result lead to an agreement to rein in ballooning overpoduction that sees at least 1 million barrels per day pumped in excess of demand.
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The front-month contract’s discount to the second-month slipped to 6 cents at the end of the session. A final list of attendees has not been released, but representatives from around 15 oil exporting nations are expected to participate.
