Iran Calls for Unity to Boost Oil Prices

VIENNA (Dispatches) -- OPEC needs non-members to help address an oil supply glut that is set to grow next year, Iran's oil minister said here Wednesday.

Date: 26 November 2014 - 21:34

News ID: ۷۸۹۷

"All the experts in the markets believe that we have an oversupply on the market and next year we will have more oversupply," Bijan Namdar Zanganeh told reporters.
But Zanganeh said it was not solely up to the Organization of the Petroleum Exporting Countries to tackle the oversupply which is sending crude prices crashing to four-year low points.
"To deal with this situation we need to have a contribution from non-OPEC producers for managing the market," he told reporters on arrival in Vienna, where the organization is headquartered.
Thursday’s meeting of OPEC is the most significant in recent years after crude futures have sunk by more than 30% since June on plentiful oil supplies, a strong dollar and worries about stalling energy demand in a weak global economy.
OPEC, which pumps out about one-third of the world's oil, is under pressure from its poorer members like Venezuela and Ecuador to cut output as tumbling prices have slashed their precious revenues.
However the organization’s Persian Gulf members, led by kingpin Saudi Arabia, have rejected calls for a cut unless they are guaranteed market share in the highly competitive arena.
Zangeneh said he had an "excellent" meeting with Saudi Oil Minister Ali al-Naimi and that their positions were now "very close".
"(There is) unity inside OPEC that we should monitor the market carefully and to react at the convenient time for managing the market," Zangeneh said when asked whether an agreement between members was emerging a day ahead of the OPEC meeting.
OPEC pumped 30.6 million barrels per day (bpd) last month, above its 30 million bpd target, according to the International Energy Agency, which advises countries on energy policy.
And some analysts believe that the organization will on Thursday agree to trim such excess rather than cut its official ceiling.
Ahead of the OPEC meeting, the world's top oil producer Saudi Arabia has cut what it charges U.S. customers, in a move seen as a bid to maintain its market share amid increasing competition from oil extracted from shale rock in the United States.
Officials from Saudi Arabia met with their counterparts from Venezuela and non-OPEC oil producers Russia and Mexico in Vienna on Tuesday.
Following the surprise gathering, Russian oil giant Rosneft said it had trimmed its daily output by 25,000 barrels because of "market conditions".
The token reduction represented less than one percent of the behemoth's total and did nothing to boost energy prices on depressed global commodity markets.
On Wednesday, U.S. and Brent crude futures declined sharply. Benchmark Brent futures were down 38 cents at $77.95 a barrel by 1540 GMT, having hit a low of $77.30 in the session. U.S. crude was down 24 cents at $73.85.
Al-Naimi told reporters that he believed the oil market "will stabilize itself eventually", increasing speculation his country would not support an output cut.
His comments were echoed by United Arab Emirates. "The market will fix itself ultimately," UAE Oil Minister Suhail bin Muhammad al-Mazroui told Reuters in an interview.
Zanganeh said OPEC should comply with its agreed production ceiling, but Iran has no plans to cut its own production.
He said "it’s very clear. OPEC decides to comply not to” breach its ceiling.
Iran, however, has no plan to reduce its output and instead is trying to boost it, Zangaheh said.
The oil producers’ group is currently considering a proposal to abide by a ceiling of 30 million barrels a day agreed in 2011—implying a production cut of 300,000 barrels a day from October levels.
The current lower prices would put out some expensive oil production out of the market, he said. The abundant supply (including U.S. output at a three-decade high) and weaker demand as the economic recovery stutters along have seen prices fall 30% since June.