Iraq’s oil ministry said on Friday it would consider selling crude through Iran should talks with the autonomous Kurds about oil exported by pipeline through their region from the northern Kirkuk fields to Turkey fail.
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Iraq – which exported more crude this month from its southern ports than in July – will continue ramping up output, its oil minister said on Saturday.
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.
Crude oil prices rose nearly $10 a barrel through early August to a high above $51 two weeks ago on expectations that the big oil producers would take some action to prop up oil prices weighed down by global oversupply.
Both Brent and WTI fell more than 1 percent on Monday on a stronger dollar and on renewed concerns about an oil glut.
In New York, a barrel of West Texas Intermediate for October delivery finished down 63 cents at $46.35.
Brent for October settlement lost as much as 64 cents, or 1.3 percent, to $49.28 a barrel on the London-based ICE Futures Europe exchange. In the United States, drillers added 10 oil rigs in the week to August 19, the eighth straight week of rig additions, as crude rebounded toward the $50-a-barrel mark, at which drilling is viable.
“Either way, despite some increases in Saudi Arabia and Iraq, Opec production seems to be flattening with the outages in Libya, Nigeria and Venezuela, knocking out some 3-million barrels of daily production and no one is holding their breath they’ll return soon”, said Nunan.
In an address on Friday, US Fed Chair Janet Yellen said there was growing justification for a near-term interest rate hike. While the freeze deal has repeatedly been noted by oil market analysts as not all that significant in terms of its effect on the fundamentals of supply, it would have a substantial effect on market psychology, probably sparking a price rally even if in reality not much production will be moved offline.
Away from the oil markets, a stronger dollar also clobbered precious metals.
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Tehran refused to join an attempt in April to freeze output at January levels, scuppering those talks because Saudi Arabia said it wanted all producers to join the initiative. Further upside above $50 likely to be limited ahead of September which has been a challenging months for the past five years, he said. The nation is the second-biggest member of Opec, pumping 4.36 million barrels a day in July, according to data compiled by Bloomberg.
