Their idea is not getting wider agreement due to Iran, which indicated that it would boost its output to pre-sanctions levels as it was affected by sanctions over the last several years.
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Analysts quickly viewed OPEC’s announcement with skepticism, arguing that increasing production from OPEC members Iraq and Iran, as well as the stubborn production coming out of U.S. shale-oil companies, would keep the market oversupplied.
Saudi Arabia oil minister Ali Al-Naimi said that freezing production would require all the major producers to reduce output.
On Wednesday, prices picked up in late trading following the release of strong gasoline demand data.
Global stocks plunged on Wednesday trading after hopes of an oil production cut were dismissed by Saudi Arabia.
It is the disparity between the glut of supply and slowing demand that has weighed on the oil price, which has fallen by about three quarters since the summer of 2014 and saw Brent crude slip below $30 last month.
“Not many countries are going to deliver, even if they say they will cut production they are not going to deliver”, he said at an energy conference in Texas.
The harsh reality from the petroleum minster took oil prices down by over 4 percent on the day and the stock market with it. The Standard and Poor’s 500 declined 1.25 percent and the Nasdaq Composite fell 1.47 percent on the day. The nation’s stockpiles expanded by 7.1 million barrels last week, the industry-funded American Petroleum Institute was said to report Tuesday.
Just a day earlier, oil prices surged after the International Energy Agency predicted that oil supply and demand would balance next year because of a steep drop in new drilling, especially in the US. The impact of the freeze will be limited because the four countries participating were already expected to have flat production, IEA executive director Fatih Birol said Monday in Houston.
“We want to see what other countries will do”. For the week ending on February 19, total oil production fell by another 33,000 barrels per day to 9.1 million barrels per day.
Iran on Tuesday vehemently rejected any possibility that it will stop increasing its oil production with the country’s oil minister Bijan Zangeneh mocking any request on Tehran to that effect as “a joke”.
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NEW YORK, Feb 24 Stocks across the globe fell the most in three weeks on Wednesday, tracking oil prices lower, while the first contraction in the US services sector since October 2013 weighed further on financial stocks.
