Oil rises after talks on output freeze in Iran

Analysts are skeptical about Iran’s willingness to freeze production at a time when the country is eager to ramp up output and reclaim its share of the world’s oil market.

“Iran agreed with the proposal. We look forward to the start of cooperation between OPEC and non-OPEC countries”, he said, according to the oil ministry.

A source close to the talks told Sputnik earlier in the day that the meeting has been held “in a negative atmosphere”.

Iranian Minister of Petroleum Bijan Zangeneh said Tehran supports any move to stabilize the situation in the global crude oil market and improve the price of the product.

Iran exported around 2.5 million barrels per day (bpd) of crude before 2012, but sanctions cut that to around 1.1 million bpd.

“Iran’s position as for this issue is very clear”.

The Islamic republic has long said it must pump more oil – despite plunging prices – as it seeks to regain market share lost during a US- and European-imposed embargo that flattened its exports.

“The idea that you might stem the supply of oil by telling everyone to freeze the production at record highs doesn’t really seem like a good strategy to try and bring up the price”, he added.

Moscow-based analysts said oil was the main reason behind the rouble’s gains, although exporters selling foreign currency for upcoming tax payments gave the currency a further boost.

And Barton says the ability of USA producers to ship oil to overseas markets will only lead to increased US production.

The comments by Zanganeh revived memories of the last OPEC meeting in December which ended without a decision after Zanganeh said he rejected any plan to curtail Iran’s production before it rises to pre-sanction levels.

Zanganeh was quoted by Shana as saying on Tuesday: “What is important is that, first, the market is oversupplied, and, second, that Iran will not overlook its quota”.

Four nations, including Russian Federation and Saudi Arabia, agreed on Tuesday to freeze their output levels if other producers do the same. USA crude was trading $1.65, or 5.7 percent, higher at $30.69 a barrel. The willingness to freeze oil production yielded positive results for United States’ oil which rose by almost 8 percent yesterday.

Still, a deal would signal a change in Saudi Arabia’s stance.

“I’m pricing between $35 and $45 for Brent by summer, as we still have a daily surplus of up to 1.7 million barrels of oil to contend with”, said Phil Davis, an independent crude trader at PSW Investments.