Saudi, Algeria oil ministers to meet Opec head
Oil shrugged of the reports that the National Iranian Oil Company said that it will increase oil output in line with customer needs and export 2.2 million barrels a day in September. Support for the deal eroded on Tuesday when Saudi Arabia’s Foreign Minister Adel al-Jubeir said the country would go along with an agreement to freeze output if other producers agreed too.
Some analysts, however, forecast a decline in crude oil inventories related to facility evacuations in the Gulf of Mexico due to storm activity last week.
The options market has seen a near-across-the-board rise in the implied volatility, a measure of the price, in buy options relative to sell options this week.
“All the solutions are possible”, Bouterfa said when asked if higher output from those countries could be accommodated within a freeze deal.
Iran’s refusal to join a similar plan in April led Saudi Arabia, its chief regional rival, to scuttle the Doha-based talks.
A meeting September 5 between Saudi Energy Minister Khalid Al-Falih and his Russian counterpart ended without concrete steps to stabilize the market.
The comments come after major oil producers Russian Federation and Saudi Arabia said Monday they would form a strategic energy partnership created to help stabilize oil markets. Perhaps it’s the 4.064 million barrels a day that the country produced in 2008, according to its submissions to the Joint Organisations Data Initiative. Energy Minister Noureddine Bouterfa traveled to Moscow on Thursday, following recent trips to Qatar and Iran.
Benchmark Brent crude oil was up 80 cents a barrel at $48.78 by 0820 GMT (1:50 p.m.in India), after settling up 72 cents on Wednesday.
In late 2000s, Iran was the second producer in OPEC with a total production of 4.2 million barrels per day, with 2.5 million barrels exported.
“Even if there were no output deal at the informal talks, oil may not fall and could stay around $45 [a bbl] as shale oil production is not growing”, said Tetsu Emori, president of Emori Capital Management in Tokyo.
Oil prices are half their level of mid-2014, hurting producing nations’ income.
The International Energy Agency has said it sees demand finally exceeding supply in the third quarter of 2016, meaning record crude stockpiles around the world should also start falling. It could be the 3.854 million that would be a 12 percent share of average total OPEC output to date in 2016, excluding new members Indonesia and Gabon - which is the same as Iran’s share of the group’s output in 2011.