FM: Iraq has to up oil output because of ‘budget hole’

Oil prices edged lower Wednesday, as the U.S. dollar strengthened and investors grew doubtful about OPEC’s ability to drain the global oversupply of crude.

International Brent crude oil futures rose 11 cents to $49.23 a barrel at 0940 GMT (4:40 a.m. ET) after climbing to $49.42 a barrel earlier in Wednesday’s session on optimism OPEC would agree to an output cut.

Brent futures were up 27 cents, or 0.6%, at $49.17 a barrel by 3.51pm Irish time.

Venezuela’s President Nicolas Maduro said on Wednesday an OPEC deal to cut output and hike oil prices was “imminent”, and dispatched his oil minister to Russian Federation to help bring other producers on board. The official OPEC meeting, and deadline for the production cut agreement, is November 30. Under the preliminary accord reached late September in Algiers, the group would reduce collective output to 32.5 million to 33 million barrels a day, compared with its estimate for production in October of 33.6 million.

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Worldwide futures were at $49.22 a barrel, up 10 cents.

An agreement to cut oil production within OPEC countries would reduce the current numbers by more than one million barrels per day.

The delegates said the matter had been deferred to the official OPEC conference next week.

Speculation was mounting this week that the experts may be close to a deal to tackle the global supply glut, sending crude prices and energy stocks surging. The government in Baghdad had argued that it needs all possible resources for its fight against Islamic State.

For more detail on oil prices, see the table below on the overall rise in OPEC October oil production, as reported by both secondary and official sources. “Our priority is to raise the price of a barrel of crude”, Iraq’s Prime Minister Prime Minister Haider al-Abadi said, as quoted by Reuters.

“We do not have a clear path to a decision on November 30 and that is what the market was looking for so we are in for another eight days of uncertainty”, said James Williams, president of energy consultant WTRG Economics in Arkansas. Iran has balked at oil production cuts after many years of USA -imposed sanctions, and Trump has complained about lifting them.

Iraqi minister: would be unfair for OPEC to ask it to cut. Iran’s oil minister, Bijan Zangeneh, also had a similar tone saying it’s highly likely that the producers reach an agreement on supply cuts. Oil production from countries outside the OPEC now represents about 60 percent of world oil output. “Given that OPEC seems to want a price range of $55/bbl to $60/bbl it is likely that if a deal is confirmed next week, it will also come with statements to convince the markets that a new policy era is starting”.