Iran will be ready to decide on capping production once output reaches the level it was before global sanctions were imposed on the country, Mohsen Ghamsari, director for worldwide affairs at state-run National Iranian Oil Co, said in an interview in Singapore Thursday.
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The International Energy Forum will take place in September 2016 in the сapital of Algeria Algiers, when the OPEC countries plan to hold an unofficial meeting, supposedly to renew discussions on the oil production freeze.
Under the deal, the two countries will form a working group to monitor the market and draft recommendations to stabilise oil prices and ensure steady investment in the industry.
“As soon as we come back to pre-sanction levels, we will be ready to discuss quotas and level of production”, Mohsen Ghamsari, director for worldwide affairs at National Iranian Oil Company, said in an interview in Singapore.
As per an analyst, “the upcoming meeting isn’t going to do very much”.
Oil at $40 to $50 a barrel is “reasonable” and the market is in “stable condition”, Ghamsari said. Meanwhile, analysts say that an increase in US drilling activity could point to an end of the decline in shale production that many hoped would help alleviate the oversupply in the market.
“Every time before an OPEC meeting they say a freeze is a good idea and every time they come out empty-handed”, Mr. Khan said.
Russian Federation and Saudi Arabia signed a memorandum on joint actions to support the stability of the oil market and guarantee a sustainable level of investments.
A new agreement between Saudi Arabia and Russian Federation provided some short-term optimism for the oil market that the world’s largest producers could cooperate to shore up global crude prices.
In early morning trade Thursday, Brent was trading up 1.6% at $48.74 a barrel, while WTI was up 1.9% at $46.39 a barrel. Iran also told OPEC it produced 3.63 million bpd in August, according to an OPEC source. Nigeria may also demand the right to restore production after militant attacks curbed output, while Libya will want to boost volumes that shrank to a fraction of pre-conflict levels.
However, it will be extremely hard to influence oil prices without the participation of other countries.
Oil has been dogged by a stubborn supply glut since late 2014, which saw prices dip to near 13-year lows below Dollars 30 earlier this year.
In the USA payrolls climbed by 151,000 in August following a 275,000 gain in July that was larger than previously estimated (180,000).
The country has boosted output quickly since the easing of sanctions in January, though additional increases may be a challenge without worldwide investment and technology.
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That isn’t to suggest that oil prices won’t rise if a cap is agreed; they inevitably will in the short term.
