Last night, global benchmarks, Brent and WTI jumped sharply after a news report from Reuters indicated that Iran is sending out positive signals that it may support joint action to pop up the market price.
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Iran has been ramping up output since the lifting of sanctions in January to reclaim its lost market share, dismissing demands to join the freeze initiative.
“Though Iran has not yet decided whether to join a new effort, Tehran appears to be more willing to reach an understanding with other oil producers”, the news agency quoted the sources as saying.
An oil well is seen near Denver, Colorado February 2, 2015.
Gasoline inventories decreased by 2.2 million barrels – and if confirmed by tomorrow’s EIA figures, this would be the fourth weekly draw for the energy source in a row.
Qamsari said Iran was still exporting around 0.4 million bpd less than the average it released on the market before sanctions were imposed against the country.
Members of the Organisation of the Petroleum Exporting Countries led by Saudi Arabia and non-members like Russian Federation are to meet informally next month in Algeria and are expected to discuss ways to stabilise the oversupplied crude market. While Brent Crude Futures have also began the day GMT by falling from $49.6 per barrel, down to $49.1 per barrel, and now trading at 49.48.
“In general, Iran prefers more actions from the OPEC side rather than just freezing at the maximum production level of all members”.
Reuters quoted an unnamed OPEC source as saying that Iran had confirmed it would participate in the September 26-28 meeting in which members would probably revive talks on freezing oil production levels. Analysts at Deutche Bank said that yesterday WTI rebounded by1.46%, although at one stage did rally almost 4% off the intraday lows, following the reports of Iranian intervention with OPEC.
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At around 0800 GMT (1500 Malaysian time), USA benchmark West Texas Intermediate (WTI) for October delivery was down 77 cents or 1.60 per cent to US$47.33, and Brent crude for October dropped 63 cents or 1.26 per cent to US$49.33 a barrel. So, the relationship between crude oil inventories and crude oil prices is inverse, as the above graph shows. While Saudi Arabia, Iran and Russian Federation have reached record production since April, Nigeria’s hit its lowest in more than two decades due to attacks on oil sites.
