NEW YORK, Aug 27, (AFP): Oil prices edged higher Friday but the market remained weak as OPEC’s key producers cast doubt on the possibility of cutting output.
Iranian Oil Minister Bijan Zanganeh on Friday said his country wanted its pre-sanctions share of the crude market, in comments that suggested Tehran might not be on board with efforts in the OPEC cartel to agree on an output cap together with Russia.
“Iran will cooperate with OPEC on improving prices and the state of the crude market, but we expect our right to restore our lost market share in the market to be considered,” he said, the ministry’s SHANA news service reported.
Earlier, Saudi Arabia’s energy minister Khalid Al-Falih also downplayed hopes for a reduction in production at the group’s meeting next month in Algeria next month.
“I don’t believe that an intervention of significance is required. I certainly don’t advocate a cut,” he told Bloomberg News.
US benchmark West Texas Intermediate for delivery in October added 31 cents to reach $47.64 a barrel.
Brent North Sea crude for October delivery rose 25 cents to $49.92 a barrel.
“Comments from the Saudi energy minister quelled expectations of a production freeze, which rekindled concerns over the ongoing oversupply,” said Lukman Otunuga, research analyst at trading group FXTM.
Oil prices had rallied last week and entered a bull market — a 20-percent rise from recent lows — after OPEC and Russia announced plans to discuss the supply crisis, which has hammered the crude market for more than two years.
But prices have taken a beating this week on concerns about prospects for success at the September meeting in Algiers.
Khalid left the door open for a freeze in output, saying it “signifies that everybody is content with where the market is today and they want it to be trending in that direction.”
But a previous OPEC attempt in April to steady output collapsed largely because of Iran’s refusal to join talks, keen to maximize its oil revenues after having just emerged from international sanctions.
Even if a deal is reached next month on the sidelines of an energy conference, there are doubts about the impact on an already oversupplied market.
“Most of the OPEC countries are sending a signal that they’re open to freezing production, but you have to remember that most of them are producing at peak levels,” BMI Research oil and gas analyst Peter Lee told AFP.
“Even if producers come to an agreement, the freeze is at a very high level.”