Iran May Reduce Its Oil Output as Part of an OPEC Deal if Saudis accept Iran's conditions.

Iran May Reduce Its Oil Output as Part of an OPEC Deal if Saudis accept Iran's conditions. (Taz).

OPEC will debate an oil output cut of 4.0-4.5 percent for all of its members except Libya and Nigeria next week.

According to a report covered by Fars, sources said Saudi Arabia and its Persian Gulf allies have signaled they were prepared to cut close to 1 million bpd of their output.

Under the Algerian proposal, Iran was asked to cut 4.5 percent from almost 4 million bpd, according to sources. But Tehran has signaled it wants to cut from higher levels of 4.1-4.2 million bpd, one of the sources said.

Iraq was asked to cut about 200,000 bpd. Baghdad is also still debating whether it should cut from the levels of OPEC’s estimates or its own, higher, production figures. Read the full story here.

OPEC puts Iran's oil output less than real volume.

OPEC puts Iran's oil output less than real volume. (Taz).

OPEC has put Iran’s oil output figure about 250,000 barrels per day less than the real volume, Ali Kardor the managing director of Iranian National Oil Company told Trend.

According to OPEC’s latest monthly report based on the secondary sources, Iran produced about 3.65 million barrels per day (mb/d) of crude oil in September.


Kardor said that the country’s real crude oil output is 0.25 mb/d more than OPEC’s estimation.

Iran plans to boost oil output to 5.5-6 mb/d by 2021.Hmmmm......This won't pass on the next OPEC meeting in November. Iran will refuse any production output cuts.Read the full story here.

Kremlin spokesman: Rosneft CEO’s words on oil production freeze refusal quoted out of context.

Kremlin spokesman: Rosneft CEO’s words on oil production freeze refusal quoted out of context. (Tass).

Russia supports oil production freeze or contraction and words of Rosneft Chief Executive Officer Igor Sechin to the contrary may be quoted out of context, press secretary of Russian President Dmitry Peskov said on Tuesday.

Lukoil expects growth of oil production in Russia in 2017 — vice-president Novak says Russia is not considering oil production cut, only oil freeze on agenda Russia works on final version of oil production stabilization — minister Gazprom supports oil production freeze, not contraction

"Sechin’s words were given without an appropriate context in this case because his answer was lengthier and with greater details," Peskov said. "We do not see any contradictions [with position of the Russian President]," he added.

"Indeed, the official position was presented by President Vladimir Putin [in Istanbul] that it is desirable to freeze [oil production] volumes or contract them," Peskov said. Read the full story here.

Russia ready to join OPEC decision to limit crude output — Putin.

Russia ready to join OPEC decision to limit crude output — Putin. (Tass).

Russia is ready to join the decision on freeze or reduction of crude production, which is important for keeping stability on the oil market, President Vladimir Putin said at the World Energy Congress in Istanbul on Monday.

"In the current situation we consider the freeze or even reduction of crude production to be probably the only correct decision to keep the sustainability of the whole global energy (market)," Putin said, adding that the move will help the market to regain equilibrium.

"Russia is ready to join the joint efforts to limit (crude) production and urges other oil exporters to do the same," he said, adding that he hopes the OPEC meeting in November will result in "certain agreements."

According to Putin, capital spending in oil production has dropped by almost $0.5 trillion in two years and the decline in investment in geological exploration has caused "the smallest oil reserves growth in 70 years."

"We’ve been witnessing a massive revocation of investment decisions on projects, which are now considered as economically unviable," he said, adding that "if these trends persist the lack of financing will become chronic and the global excessive production of energy resources will inevitably turn into a deficit and new unpredictable price shocks and will eventually hurt both producers and consumers."

In this respect, Russia welcomes the decision to freeze or reduce crude production, Putin said, adding that particular agreements reached in this sector with OPEC will give "a positive signal to markets and investors" and "will help subdue speculative activity and avoid new price fluctuations."

The Russian leader noted that there are no real grounds so far to say that the hydrocarbons era is close to its end.
"Many people start saying in conditions of the oil prices drop by almost twofold that the hydrocarbons era is approaching its end and time has already come to completely change the focus to alternative energy sources. I believe no real grounds are in place so far to make such far-reaching conclusions, at least for the time being," Putin said. Hmmm.....As i said before 2017 will see higher Oil prices, 2018 prices will depends on which US pres is elected. Read the full story here.

Iran Says Higher Global Oil Prices Essential, signals willingness to cooperate with OPEC.

Iran Says Higher Global Oil Prices Essential, signals willingness to cooperate with OPEC. (IFPnews).

In a telephone conversation with Venezuelan President Nicolás Maduro on Monday, Rouhani commended the stance adopted by Caracas at an extraordinary meeting of the Organization of the Petroleum Exporting Countries (OPEC) in Algeria in favor of maintaining Iran’s oil quota and raising its oil output to pre-sanctions levels.

“All must make efforts so that the committee of experts would take decisions to clear the way for increasing global oil price in the [OPEC] meeting in November,” the Iranian president said, adding that OPEC countries must hold “serious negotiations” with non-OPEC producers in order to increase and stabilize oil prices at international markets.

He also called for expert-level meetings to determine member countries’ oil export quotas.

OPEC members agreed during their extraordinary meeting in Algiers, Algeria, on Wednesday to limit production in an effort to raise the low crude prices. They decided to cut production by 750,000 barrels a day.

Iran, however, has been exempted from the decision because of its exceptional situation of having been under sanctions for a number of years.

Since the removal of nuclear-related sanctions targeting its oil industry in February, Iran – which is OPEC’s third largest producer after Saudi Arabia and Iraq – has been boosting production in order to reach previous levels and has rejected calls on the country to freeze production as unfair.

Iran, whose production has reached 3.6 million barrels per day, insists on its right to increase its crude output to around 4.1-4.2 million barrels per day.

OPEC is yet to decide on how much each country should produce during its next meeting in Vienna in November.

Non-OPEC producers including Russia will also be invited to join the deal.


The Venezuelan president, for his part, said Tehran and Caracas have common and coordinated stances on regional and international developments, particularly on OPEC-related issues. Hmmm.....as i always said once Iran reaches pre sanction level of production they will talk, now who is willing to abandon part of his market?

The Outlook for Oil prices.

The Outlook for Oil prices. (Taz).

I'm posting this because I agree with him the increase in Price per barrels is temporary, it will come back down.

Short Term.

In the next 3 to 6 months, in the absence of major coordinated production cuts, I believe we will see the market price collapse, possibly to levels which test the lows of $26/barrel or so reached in January of this year.

In my analysis, the doubling of market benchmark prices (US WTI and North Sea Brent/BFOE grades) since then represents a financial bubble. This was created by the purchase of massive futures contract positions by managed funds. These market positions - only some of which are the hedge funds whom commentators blame - are supported by liquidity sourced from Euro Quantitative Easing by the European Central Bank.

Furthermore, the current market noise blaming supply disruptions - which to be fair do exist in Nigeria and Libya particularly - ignores the record levels of Iraqi oil production and Iranian oil production which has almost reached pre-sanction levels.

But there is another far more important factor which is not widely understood. Most market commentators have a fixation on reported crude oil inventory levels and their daily recommendations and comments react breathlessly to changes in stocks of oil.

Now, while oil producers and refiners maintain buffer stocks for resilience reasons of security of supply and demand, oil buyers such as China, increasingly also have a financial motivation which is that they prefer to hold oil stocks as a reserve asset to holding dollar reserve assets, which return zero percent per annum.

Commercial oil producers & refiners, and oil traders, on the other hand, are intermediaries or middlemen who are motivated by dollar profits and not by charity. What I mean by this is that such market participants will not maintain an inventory of oil stocks above an absolute minimum unless their costs of storage in tank or tanker, insurance, and bank debt interest costs are met.

Read the full story (Medium and long term) here.