OPEC: Iran seeks to boost oil production

Oil rose towards US$34 per barrel on Thursday, hitting a three-week high and bouncing well off a 12-year low set this month, supported by the possibility that major producers may cooperate to cut production.

Reiterating Iran’s official stance, Mr. Rouhani blamed regional rival Saudi Arabia for the dive in Crude Oil prices, which have halved since last May as global supply outstrips demand. Neither EconoTimes nor its third party suppliers shall be liable for any errors, omissions or delays in content, or for any actions taken in reliance thereon. Novak stressed it is “too early” to call anything a concrete agreement.

That appeared to pour cold water on possible joint OPEC and non-OPEC production cuts mentioned by Russian Energy Minister Alexander Novak on Thursday, comments which raised hopes of the first such global output deal in over a decade.

Oil fell amid growing doubts that OPEC and other producers will agree to trim crude production to bolster prices.

“Potentially, this will happen with Russia’s cooperation limited to half the percentage reduction that OPEC members need to make for the adjustment”, analysts said.

The minister also alleged OPEC heavyweight Saudi Arabia had proposed that oil-producing countries cut production by up to 5 percent, a prospect he said would be discussed at an upcoming meeting.

Despite the fact that the speculation alone is pushing oil prices higher, and negative news suggesting the deal was purely speculation would likely see oil prices tumbling back down.

“Even if OPEC were ready to change tack and coordinate output cuts, it is not obvious that Russian Federation would be a reliable partner”, Jessop said in a note.

Saudi Arabia is investing in its oil fields to sustain production amid a price plunge to the lowest in 12 years, according to Aabed A Al-Saadoun, deputy minister for company affairs at the Ministry of Petroleum and Mineral Resources. The publication, citing “a source familiar with Iranian thinking”, noted that Iran lost out on 1.1 million barrels per day it could have exported due to global sanctions that are now lifted. “With capital expenditure slashed and energy projects killed, a 5 per cent cut would get the market in balance”, said Mr Phil Flynn, a senior market analyst at Price Futures Group.

Excluding the contribution of Indonesia, which returned as an Opec member last month, January’s Opec output totalled 31.9 million barrels per day, the highest since the Reuters survey began in 1997.