Reportedly, six members of OPEC have agreed to hold an urgent meeting to discuss the possible oil production cuts to push oil prices up.
According to Eulogio del Pino, the oil minister of Venezuela, initiator of holding such a meeting, Iran, Oman and Iraq are among those who agreed on it. Russia, he said, also support the idea to hold urgent meeting.
Alexander Novak, Russian energy minister, said Jan. 28 that the planned OPEC meeting in February with representatives of other oil-producing countries could discuss reduction of oil production by each producer country by five percent, but a general agreement is needed for that.
Headrick believes, that even if there is an agreement, it is unlikely that Iran and Iraq will comply with a coordinated production cut.
Currently Iraq is the only country that doesn`t fall under OPEC production quota. The country produced 4.3 million barrels of oil per day by end 2015, according to OPEC.
Free of sanctions, Iran plans to increase its oil export by 500,000 barrels per day, and then raise the figure by another 500,000 to two million barrels per day within a six month period.
“Iran is determined to return lost production, which will help keep global oil values pressured,” Headrick said.
Speaking about the current oil prices, Headrick said that volatility near $30 can be expected to continue, in part on short covering rallies.
“However, the fundamental outlook remains weak due to a supply overhang that should continue to keep crude oil values under pressure in the medium term,” he said.
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