Published: Wed, September 28, 2016
Global Media | By Abel Hampton

Iran dims hopes for deal on output freeze this week

Iran today ruled out an imminent agreement with other major oil producers to freeze output as regional rivalry with Saudi Arabia hindered efforts to reverse a price slump. "There is no new fundamental development that is more important than Algiers".

Crude oil prices drop more than 2 percent at the start of trading Tuesday after the World Trade Organization cuts its prospects for growth. Iran, which pumped about 3.6 million barrels a day last month, is seeking a 12 to 13 per cent share of OPEC's market, he added.

BAGHDAD, Sept 27 Iraq is carrying out a mediation between Saudi Arabia and Iran to bring about an agreement that would lift crude prices, at a meeting of crude-producing nations in Algiers, Iraqi Oil Minister Jabar Ali al-Luaibi said on Tuesday.

Minister of Petroleum Eulogio Antonio Del Pino told reporters eaelier that Venezuela hopes that after OPEC discussion of oil production freeze up to 1 mln barrels of oil per day may leave the market.

Still, the mere fact there are numbers on the table before OPEC's formal meeting in Vienna in November shows that Saudi Arabia and Iran are closer to a deal than any time in the last two years. Freezing output was first proposed in February, but a meeting in April ended with no final accord. The people familiar with the proposal said it could be framed to OPEC members as a freeze, using January 2016, for example, as the reference point instead of August, when the cartel's production was unusually high. Brent traded at $46.27 on Tuesday afternoon in London, down 3.46% from a day earlier. Prices have averaged about $44.81 this quarter.

The price for December futures of the North Sea Brent oil mix decreased by 1.59 percent to $47.17 per barrel, while the price for November futures of WTI oil decreased by 1.44 percent to $45.27 per barrel as of 12:41 (GMT+4) September 27. The contract gained $1.46, or 3.2 percent, to $47.35 on Monday. In Saudi Arabia, tentative moves toward economic reform haven't prevented two years of weak prices causing financial havoc: it's burning through foreign-exchange reserves, government contractors have gone unpaid and civil servants will get no bonus this year. "Several non-OPEC countries, including the U.S., Russia, Kazakhstan, Norway and Great Britain - have announced they will increase output, which would offset an OPEC freeze". He said he will meet with his Iranian counterpart to discuss "potential coordination and actions on the market", according to the Tass news agency. "The oil market is very volatile. It always seems to come back to that level".

At stake isn't just current oil output levels, but a mix of Middle East politics and domestic pride that have over decades made the allocation of individual ceilings for each member of the Organization of Petroleum Exporting Countries the most hard issue the group has to deal with.

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