OPEC Doesn’t Want Brent Over $60 a Barrel, Says Iran’s Oil Minister

“Members of the Organization of Petroleum Exporting Countries are not keen on increased Brent crude prices above $60 a barrel because of shale oil,” Iran Oil Minister Bijan Namdar Zanganeh said, according to the ministry’s news service Shana. Prices have climbed in recent days because of production cuts and increased demand for petroleum products due to cold weather, he said.

While the view isn’t universally held among OPEC ministers, the comments show concerns among some countries that keeping production curbs in place as a strengthening global economy drives demand could spur more output from shale producers in the U.S. Higher prices also encourage producers to hedge future output, adding to supplies.

OPEC and allies including Russia agreed in November to extend output cuts to the end of this year to reduce global inventories. Iran, OPEC’s third-largest producer, isn’t required to cut output under the agreement. It pumped 3.8 million barrels a day in December, according to data compiled by Bloomberg.

U.S. output will rise by at least 830,000 barrels a day this year, JBC Energy GmbH said Tuesday in a note. That could cause U.S. crude prices to “cool” in the first half, the Vienna-based researcher said. The U.S. pumped about 9.34 million barrels a day last year, according to Department of Energy data compiled by Bloomberg.

Shale oil isn’t the only source of supply that’s flowing back into the market. Iraq’s Oil Minister Jabbar Al-Luaibi said in December he’s optimistic prices will rise this year. The country is working to expand output capacity so that it can pump more when the agreement on curbs ends, he said.
more detail at:  https://www.bloomberg.com/news/articles/2018-01-09/iran-s-zanganeh-says-opec-doesn-t-want-brent-over-60-a-barrel