Oil lower on deal skepticism, Iran resistance – CNBC

11 months ago Comments Off on Oil lower on deal skepticism, Iran resistance – CNBC

Iran, which was not present on Tuesday’s meeting, planned to increase output by at least 500,000 barrels a day this year following the lifting of Western sanctions last month. On Wednesday, Iran’s OPEC envoy told Shargh newspaper that it was “illogical” to ask Iran to freeze its oil production level, Reuters reported.

“Asking Iran to freeze its oil production level is illogical … when Iran was under sanctions, some countries raised their output and they caused the drop in oil prices … how can they expect Iran to cooperate now and pay the price?,” Mehdi Asali was quoted as saying.

Market watchers received news of the deal with skepticism because not only do Iran and Iraq need to agree to the freeze, but even if the deal went ahead, it would be unlikely to solve the problem of a supply glut.

Russia pumped a post-Soviet Union record high of 10.88 million barrels a day in January, while Saudi Arabia’s output was near its record high around 10.2 million barrels a day, senior commodities editor at The Economist Intelligence Unit (EIU), Sebastien Marlier, said.

Questions were also raised over whether Russia and indeed Saudi-dominated OPEC itself would be disciplined enough to respect the agreement.

Oil lower on deal skepticism, Iran resistance – CNBC}