TEHRAN, Apr 30 (Reuters): Iran's Oil Minister said on Saturday OPEC and non-OPEC countries had given positive signals for an extension of output cuts, which Tehran would also back.
The Organisation of the Petroleum Exporting Countries (OPEC) meets in May to discuss oil supply policy. Oil prices fell last week though they closed higher on Friday on growing hope that OPEC might agree to extend production cuts long enough to reduce a global crude glut.
"During these last days we received a positive signal from OPEC members and non-OPEC contributors in this agreement for cutting the production for extending this agreement for the second half of 2017," minister Bijan Zanganeh told reporters.
Zanganeh blamed the United States for lack of foreign investment in Iran's energy sector, citing political pressure on international oil companies.
"They (US) cannot stop us, anyone cannot stop our activities for developing oil and gas but … they can reduce the acceleration of our activities," he said.
Under a deal reached in 2015, Tehran agreed to curb its nuclear programme in exchange for lifting of most international sanctions imposed on the country. But many foreign investors have continued to be put off by obstacles to doing business in Iran, including lingering unilateral US sanctions.
Another report from London adds: Supply and demand in the oil market could fall into balance by the end of this year if OPEC and its partners extend their deal to reduce crude output, a Reuters survey forecast on Friday.
However, the prospect of rising output from outside OPEC, led by US shale oil producers, could continue to hamper the rebalancing process, analysts said.
The Reuters survey of 35 economists and analysts forecast that Brent crude would average $57.04 a barrel in 2017, compared with last month's forecast of $57.25 and an average so far this year of about $55.
"Growing oil production in the US will remain a deterrent to further extensions to the output cap by OPEC and non-OPEC countries … (and) once again reinvigorate debate on defending market share among countries participating in the deal," said Abhishek Kumar, Senior Energy Analyst at Interfax Energy's Global Gas Analytics in London.
The agreement between the Oorganisation of the Petroleum Exporting Countries and some of its rival exporters, including Russia, to cut output by 1.8 million barrels per day (bpd) will expire at the end of June, though most analysts expect it to be extended to the end of the year.
OPEC compliance, as reported by OPEC and secondary sources, appears to be at high levels and is likely to remain so until OPEC's next meeting in May, when strategy for the second half of the year will be decided, said Giorgos Beleris, analyst at Thomson Reuters' Oil Research and Forecasts.
"Key Middle East producers seem willing to cap crude output for another six months, hoping to see crude prices close or above the $60 a barrel mark."
But higher prices could encourage US shale producers to increase drilling and undermine OPEC's efforts, analysts said.
US shale production in May was set for its biggest monthly increase in more than two years.
"Revival of US production is having a negative impact on crude prices. However, in recent weeks this negative influence has been offset by expectations that more consumption from refiners ahead of the driving season will draw US stocks," Intesa Paolo analyst Daniela Corsini said. [Read More]

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Source: The Financial Express