Russian Federation ‘optimistic’ on OPEC output deal

Oil retreated for much of the past three weeks amid skepticism about OPEC’s ability to implement a deal at its November 30 meeting. Iran overtook Saudi Arabia as India’s top oil supplier for the first time in October, shipping data showed.

Organisation of the Petroleum Exporting Countries (OPEC) regarding the production cut.

“Oil traded in a sideways range overnight, as the stronger USA dollar (overshadowed) optimism from Saudi’s Energy Minister over a production cut agreement”, said Jeffrey Halley, senior market analyst at OANDA brokerage in Singapore. Iraq was second and Iran came in third.

Crude oil traded near $46 a barrel as Saudi Arabia and some other Opec nations meet with Russian Federation for informal talks without oil ministers from Iran and Iraq, the two countries that pose the biggest hurdle to an output deal.

Iran has previously said it would accept a freeze at between 4.0 and 4.2mn bpd. It closed Tuesday 5.7 per cent higher on news that members of the Organization of the Petroleum Exporting Countries would renew efforts to limit production.

According to Reuters sources, the Islamic republic has yet to respond to OPEC’s proposal.

Al-Falih said yesterday’s meeting went well, but declined further comment. On November 16, Alexander Novak, Russia’s energy minister, said that Russia supports OPEC’s decision on the supply cut.

“Russia has earlier spoken with mixed voices regarding joining OPEC in an output cut or freeze”, said Michael Poulsen, oil risk manager at Global Risk Manager. “The reference to 32.5 was the new element”, which is a level that would bring OPEC production in line with demand for its crude next year, he said.

The Azeri Energy Ministry said yesterday it would send a delegation to consultations in Vienna later this month. But rising oil production and changing fundamentals “make a credible OPEC cut all the more hard to achieve”, Jason Gammel, analyst at USA investment bank Jefferies, said. Also on Nymex Thursday, December reformulated gasoline RBZ6, +0.04% climbed 2.4 cents, or 1.8%, to $1.343 a gallon and December heating oil HOZ6, +0.93% added 1.2 cents, or 0.8%, to $1.447 a gallon.

USA benchmark WTI crude () was down 11 cents, or 0.24 percent, at $45.46 a barrel at 0040 GMT. It was on track to gain 3.6 percent for the week, the first weekly increase in four.

“Reports of a diplomatic push by OPEC to strike a deal are supporting the markets”, said Tamas Varga, oil analyst at London brokerage PVM Oil Associates. “Stocks of crude oil jumped 5.27 million barrels, much more than expected”, Australian bank ANZ said in a note.