International Brent crude oil futures were trading at $49.40 per barrel at 0145 GMT, down 52 cents, or 1.0 per cent, from their previous close.
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And though the comments of Energy Minister Khalid Al-Falih late on Thursday, underlining that rather than making physical intervention, the fundamentals of demand and supply needed to be allowed to take care of the oil markets, did dampen some enthusiasm, yet, the overall sentiments today seem much more positive than at the beginning of the month. OPEC said this month that its members will discuss markets at a September gathering of the International Energy Forum in Algiers.
But a previous OPEC attempt in April to steady output collapsed largely because of Iran s refusal to join talks, keen to maximize its oil revenues after having just emerged from worldwide sanctions.
Oil prices edged higher Friday but the market remained weak as OPEC s key producers cast doubt on the possibility of cutting output. However, the suggestion never came to fruition because Iran refused to go along with a production limit. It’s not in their interest to halt output. Opec’s market share had reportedly fallen then from 32.7pc to 32.3pc whereas the share of Saudi Arabia in the global oil production had fallen from 10.6pc to 10pc. Iran should be let to recoup its share of global sales, he said. The UAE is the fourth biggest OPEC producer, pumping 2.93 million barrels a day in July.
Iran had said late last week that it would only cooperate in upcoming producer talks in September if other exporters recognised Tehran’s right to regain market share lost during worldwide sanctions that were only lifted in January.
I certainly don’t advocate a cut.
The comments about high oil output have dampened expectations that OPEC and outside producers such as Russian Federation will agree steps next month to support prices such as a production freeze, following the collapse of a similar effort in April. Speaking publicly for the first time since talk about freezing production surfaced in the last few weeks, Al-Falih said there have not yet been any specific discussions of a production freeze by OPEC, even though world supply remains high. Its total output has risen from as low as 1 million barrels a day under sanctions to 3.6 million in July, not far from Iran’s pre-sanctions output level of 4 million.
Iran will be wary of curtailing its output when Saudi Arabia, Iraq and other producers may seek to sell more, Robin Mills, chief executive officer of consultant Qamar Energy in Dubai, said Sunday by phone.
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“An agreement seems some way off, if not impossible”, said Stuart Ive, a client manager at OM Financial.
