A divided OPEC is set to meet Friday and try to decide a way ahead amid a challenging market.
Advertisement
– He compares any potential efforts from OPEC members to restrict Iran’s oil exports to “continuing sanctions against Iran”.
At 1200 GMT, US benchmark West Texas Intermediate for delivery in January rose 68 cents to $40.62 a barrel, from Wednesday’s close. That same month, OPEC’s 12 members produced about 31.5 million barrels per day, 1.5 million barrels above target.
Brent crude settled up $1.35, or 3.2 percent, at $43.84 a barrel, rising more than $2 at the session high. Production of crude and gas condensate averaged 10.779 MMbpd during the month, according to data from the Energy Ministry’s CDU-TEK unit, an increase of 1.3% from a year earlier.
Upon arrival in Vienna on Thursday, Iran’s oil minister, Bijan Zanganeh, insisted that his country would not give in to demands to curb its oil production.
Iran on Thursday said it would move forward with plans to boost its oil output, rejecting the Saudi call to join an OPEC production cut.
Iran’s oil minister was quick to dismiss on Thursday the possibility of limiting Tehran’s production ramp-up once Western sanctions are lifted.
Opec sources and analysts said the Saudi proposal would be hard to agree as Iraq is struggling to balance its budget despite soaring output and Iran has long argued its market share was stolen by rivals during the years of sanctions.
Zanganeh said, “We don’t accept any discussion about the increase of production after the lifting of the sanctions: it is our right and no one can limit us to do so”.
The minister added that he was coming into Friday’s OPEC meeting with no proposal in hand on output strategy, and he said that only after Iran fully returns to the global market would it agree to discuss new output ceilings or individual country quotas within OPEC.
“We are maintaining our view that apparent demand growth in 2016 will ease to under 2% on the back of slowing economic growth momentum”, said Platts China Oil Analytics senior analyst Yen Ling Song in a statement.
Heating oil settled up 4 percent after being depressed in recent days by a lack of cold weather in the northeastern United States, a major market for heating.
Advertisement
Ed Cowart, of Eagle Asset Management, points out that uncertainty over global supply was the “justification for $100-per-barrel oil a couple of years ago”. Prices were already showing signs of dropping at 7:00 a.m. on Wednesday, trading at $41.68 per barrel, which is down 17 cents from its last settlement and down more than 10 percent since the start of November. The cabinet talked of a willingness to cooperate with both OPEC and non-OPEC producers, but Gulf ministerial sources said that it is hard to see the kingdom cutting production if Iraq and Russian Federation don’t do the same.
