“Recent Iranian statements make it crystal clear to the market that they aren’t about to freeze production”, said Mike Wittner, head of oil markets at Societe Generale SA in NY.
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“This has triggered a broad and intensive dialogue between all oil producers out of the conviction that current oil prices aren’t sustainable”, the ministry added.
Oil prices have been declining for the past 18 months as an oversupply of oil floods world markets.
To rein in the glut, Saudi Arabia and non-OPEC member Russian Federation, the world’s two largest oil exporters, along with Qatar and Venezuela have proposed major producers should freeze output at January levels.
The initiative is backed by 15 countries accounting for about 73% of global oil output, said the minister, who also serves as president of the Organisation of the Petroleum Exporting Countries (OPEC). “Qatar, the chairing country in the OPEC, will now send invitations to all countries, both OPEC and non-OPEC members”.
Crude inventories in the United States grew by 1.3 million barrels in the week to March 11 to 523.2 million, hitting record highs for a fifth straight week, data from the Energy Information Administration (EIA) showed.
Brent crude was trading just under $39 a barrel on Wednesday, up from a 12-year low of $27.10 reached in January.
However, oil prices have been retreating from the start of this week after Iran stated it is determined to keep raising its output to pre-sanction levels before it would consider freezing production.
Qatar’s oil minister said that producers would meet in his capital on April 17.
Sources familiar with the matter said the issue was among the factors which caused an earlier plan to hold the producer meeting on March 20 to be dropped.
A reluctant Iran said it would back a coordinated plan, but not until it regains its position in the global market after several years of economic isolation brought on by nuclear-related sanctions.
The Qataris called the meeting a follow up to the February 16 agreement, and OPEC delegates said the goal was to bring more producers into the fold.
“You can’t ignore all other oil producers”.
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Novak said Wednesday that Iran had indicated that it is “ready to participate” in the meeting. Baghdad on Monday said the freeze initiative was acceptable.
