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Oil rises on supportive Iran freeze comments

Published 09/07/2016, 04:06 AM
© Reuters.  Oil edges higher on supportive Iran freeze comments
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Investing.com - Oil prices edged higher during Europe's session on Wednesday, as Iran signaled it was prepared to work with Saudi Arabia and Russia to prop up oil prices.

On the ICE Futures Exchange in London, Brent oil for November delivery tacked on 33 cents, or 0.7%, to trade at $47.59 a barrel by 4:05AM ET (08:05GMT). A day earlier, London-traded Brent futures dipped 37 cents, or 0.78%.

Iranian Oil Minister Bijan Zanganeh met OPEC Secretary-General Mohammed Barkindo in Tehran on Tuesday and said he would support any measure to stabilize crude prices at around $50-60 per barrel.

"Iran wants a stable market and therefore any measure that helps the stabilization of the oil market is supported by Iran," Zanganeh said.

Brent spiked sharply on Monday after Saudi Arabia and Russia pledged to work together to support the market. But prices have since fallen back as the agreement stopped short of delivering imminent action to tackle a supply glut.

The Organization of the Petroleum Exporting Countries, led by Saudi Arabia and other big Middle East crude exporters, will meet non-OPEC producers led by Russia at informal talks in Algeria between September 26 and 28 to discuss a supply freeze.

Despite the supportive remarks, chances that the upcoming meeting would yield any action to reduce the global glut appeared minimal, according to market experts.

Instead, most believe that oil producers will continue to monitor the market and possibly postpone freeze talks to the official OPEC meeting in Vienna on November 30.

An attempt to jointly freeze production levels earlier this year failed after Saudi Arabia backed out over Iran's refusal to take part of the initiative, underscoring the difficulty for political rivals to forge consensus.

Meanwhile, crude oil for October delivery on the New York Mercantile Exchange was at $45.17 a barrel, up 34 cents, or 0.76%, as market players shifted their focus to weekly data from the U.S. on stockpiles of crude and refined products.

Industry group the American Petroleum Institute is due to release its weekly report at 4:30PM ET (20:30GMT) later on Wednesday. Official data from the Energy Information Administration will be released Thursday.

The reports come out one day later than usual due to Monday's Labor Day holiday in the U.S.

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