OPEC and other producers can reconcile talks aimed at stabilizing the oil market with the prerogative of Iran, Nigeria and Libya to boost output, according to Algeria’s energy minister.
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Iran now products some 3.6 million barrels of oil per day. “The 4 million bpd production level is not very far from our hands”.
So, in an attempt to cut through the noise, it’s worth looking at exactly what the oil leaders of those countries have said recently, and take their words at face value instead of trying to work out what analysts and media think they were really trying to say.
Several OPEC producers have called for an output freeze to rein in the glut, which arose as supplies from high-cost producers such as the United States soared. “Iran wants to go back to increase production, find their old customers and get their market back”, Takin said.
If crude that doesn’t usually flow to Asia is viable at current prices, it will only be even more competitive if the oil price does rise to somewhere closer to $60 a barrel, a level that the major oil producers would no doubt like to see.
NYMEX crude for October delivery did not settle on Monday due to U.S. Labor Day holiday.
Oil prices inched lower on Wednesday as market participants remained skeptical that producers will reach an agreement to freeze output to rein in a global supply glut. A previous proposal to limit production collapsed in April when Saudi Arabia insisted on Iran’s participation. Tehran has said that before considering cooperation, its production had to rise to between 4 million and 4.2 million barrels a day. “It is hard as the competition is quite high”.
Crude has gained about 10 percent since the Organization of Petroleum Exporting Countries said in August that it will hold talks in Algiers.
With three weeks until a meeting in Algeria, oil traders are keeping tabs on Russian Federation and OPEC, hoping for signs they will find an agreement to address a global supply glut that has hammered prices for two years.
OPEC and Russian Federation are putting cooperation back on the table, after two years of a Saudi-led strategy by the producer group to pump flat out to protect market share against the surge in US shale oil.
The country has boosted output quickly since the easing of sanctions in January, though additional increases may be a challenge without global investment and technology.
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Meanwhile, Iraq has given its fellow Opec members the level of crude production at which it would be prepared to freeze output, according to the top official at the state oil marketing company.
