Iraq Calls in Support for Freeze Deal
Just five days ahead of much anticipated oil producers’ meeting in Doha, which will gather oil chiefs from Saudi Arabia to Russia, Iraq has extended its support for the deal. The head of Iraq’s state oil company said that biggest producers must agree to a production freeze on 17th, to pave way for higher prices. According to him, everybody in need of such deal and Iraq fully supports it.
So far 17 nations have either joined the initiative led by Venezuela, Qatar and Russia, or shown interest to join and they control about 65% of global production.
However some countries are still holding out such as Iran, which argues its current production levels very low. Libya has said that it will not join the talks.
Focus will be on Saudi Arabia, agreeing by whom could boost oil price in the near term. Saudi crown prince, posed doubts few weeks back over the freeze saying that Saudis won’t join without Iran and other nations.
However, unlike Saudi Arabia, many countries like Iraq, Russia recognize Iran’s right to boost production, at least to pre-sanctions level.
Investment banks like Goldman has pointed that supply will still persists even if a deal is reached, which we also believe to be likely.
Nevertheless, April 17th meeting if concluded well, may influence oil market for years to come if not decades.
Global production ceiling is in discussion here.
WTI is currently trading at $40.8/barrel and Brent at $1.6/barrel premium.
The material has been provided by InstaForex Company - www.instaforex.com