Oil prices rise on Iran talks with other producers

Iranian Oil Minister Bijan Namdar Zanganeh speaks during the Tehran Summit on Nov 28, 2015.
Iranian Oil Minister Bijan Namdar Zanganeh speaks during the Tehran Summit on Nov 28, 2015. PHOTO: AFP

NEW YORK (AFP) - Oil prices were lifted on Wednesday by news that Iran entered talks with other major producers to address low prices, although it stopped short of committing itself to any production curbs US benchmark West Texas Intermediate for March delivery advanced US$1.62 to US$30.66 a barrel on the New York Mercantile Exchange.

In London, Brent North Sea crude for April delivery rose US$2.32 to US$34.50 a barrel.

Analysts were encouraged that Iran's oil minister met with representatives of other major producers a day after Saudi Arabia, Russia, Venezuela and Qatar said they were prepared to freeze output at January's level, but only if other major producers followed suit.

Iranian oil minister Bijan Zanganeh welcomed the Saudi-Russian move but signalled it alone was not enough to resolve the problem of low prices for producers.

He also stopped short of committing Iran to any production curbs.

"This is a first step but we need others. We look forward to the start of cooperation between Opec and non-Opec countries," he said, according to the oil ministry.

"We support any measure that can stabilise the market and increase prices."

 

Citi Futures analyst Tim Evans warned Wednesday's rally in oil prices could be brief.

"Without a commitment from Iran to hold production at current levels there's really no change in the expected future production that would provide fundamental support for prices," Evans said.

But Again Capital's John Kilduff said the talks could become significant.

"The market is rewarding Opec for coming together here," Kilduff said.

"Just the fact they were able to have a simple meeting paves the ground for a potentially better deal in the future."