They want prices to go up and they know the only way to do that is for oil production to drop. Libya and Nigeria, for instance, have both seen production plummet because of local mayhem. “A non-binding commitment to stabilise oil markets is possible, but it would likely lack teeth”, it said. Crude was trading at US$44.94, up 1 per cent, as of 12.04pm London time today.
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“For us in the UAE, we are for a decision”.
“Unless there’s an impressive production cut by OPEC on top of a freeze, I think we’ll give back everything we’ve gained by the end of this week”, said Tariq Zahir, an oil bear at Tyche Capital Advisors in NY. Oil investors turned bearish at the fastest pace in more than a year as they lost confidence that Opec will reach a deal with other producers to limit supply at a gathering this week in Algiers. “We expect there will be a pre-agreement”.
The latest numbers show Iran is getting close to its goal of four million barrels per day, as production has already reached 3.8 million barrels.
Oil, however, held steady after the brief initial climb as the world’s largest producers gathered in Algeria to discuss ways to support the market.
The fall in prices has been causing problems for poorer members of Opec.
Saudi Arabia proposed to cut its production to January levels, Algerian Energy Minister Noureddine Boutarfa said Sunday.
Riyadh’s goal in Algiers is to build a consensus on production that could be drafted into a formal agreement at the November policy meeting, but any output freeze that excludes Iran would be ineffective, noted Azlin Ahmad, crude oil editor at Argus Media.
Oil futures were rebounding on Monday, and were up over 3% in mid-day trade, almost recouping the 4% the commodity lost on Friday.
Some ministers and officials expressed hope that a deal could emerge this week.
One OPEC delegate said the focus was now firmly on trying to persuade Iran to freeze output at levels acceptable for the rest of the producer group.
“It’s a good opportunity for us in the post-sanctions era to take advantage of the situation, as we need three things: the market, the financial resources and investment, and third, the technology”, Zanganeh told state radio before leaving Tehran for the International Energy Forum. The crisis-stricken country produced just 2.15 million barrels of crude oil per day in June, according to S&P Global Plats estimates.
Speaking to the Iranian Oil Ministry’s news website Shana, Iranian Oil Minister Bijan Zanganeh said the prospects for a definitive deal in Algeria were zero.
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Bjarne Schieldrop, chief commodities analyst Nordic bank at SEB, felt the catch of cutting oil production is that if Opec and Russian Federation decide to cut, then these volumes will eventually move back into the market again.
