OPEC meets, tries to salvage deal limiting oil output

OPEC meets, tries to salvage deal limiting oil output

On the eve of today's meetings, OPEC Conference President Mohammed Bin Saleh Al-Sada said that while there were signs that a rebalancing of the global oil market is under way, "price volatility is still a significant concern".

Brent for January settlement rose as much as 64 cents, or 1.4 percent, to $47.88 a barrel on the London-based ICE Futures Europe exchange.

Iranian semi-official news agency MEHR published an editorial on Sunday accusing Saudi Arabia of declaring a new "war on oil prices" and reneging on its promises to limit output.

In the two-month run-up to this week's meeting in Vienna, oil has swung between $44 and $53 a barrel amid investor skepticism that OPEC can deliver on its September 28 pledge in Algiers to cut output to the 32.5 million to 33 million barrels a day. "It will either be a large cut or nothing, rather than a face-saving announcement".

In June of 2014, oil traded at over $100 a barrel. News from Vienna outlines that OPEC has agreed to cut production to the bottom of the end of the previously suggested range, with a 1.2 mn bbl/day reduction set to drop the groups production to 32.5 mn bbl/day. "There's still a few gray areas we have to patch up, but I like to go in believing that we're going to reach a deal".

Iraq's Minister of Oil Jabar Ali al-Luaibi didn't say whether his country was ready to cut output.

Opec member Iraq has also been pressing for higher output limits, saying it needs more money to fight the militant group Islamic State.

More news: Games With More To Come

Oil prices gained more than 2 percent on Monday in volatile trading after falling as much as 2 percent, recouping losses as the market reacted to the shaky prospect of major producers being able to agree output cuts at a meeting on Wednesday.

Adding to the difficulties is the fierce rivalry between Shia Iran and Sunni Saudi Arabia, engaged in a proxy war in Yemen and backing different sides in Syria. "We'll have to see the real thing; with Iraq, it's the math is fuzzy", said John Kilduff, founding partner of Again Capital.

At negotiations in Vienna, countries have fought to the very last barrel.

U.S. West Texas Intermediate crude futures for January delivery rose $4.34 to $49.57 a barrel as of 2:03 p.m. On Tuesday, Iran wrote to OPEC saying it wanted Saudi Arabia to cut production by as much as 1 million bpd, much more than Riyadh was willing to offer, OPEC sources who saw the letter told Reuters.

Oil on Tuesday fell by almost 4 percent on disputes between Saudi Arabia, Iran and Iraq regarding details of the planned cut.

Further reinforcing the notion that Saudi Arabia is no longer a devout proponent of the cut, Al-Falih, just last week, bowed out of a meeting with non-OPEC producers, including heavyweight Russian Federation, which was supposed to take place on Monday, just two days before the OPEC meeting in Vienna, saying there was no internal OPEC agreement on policy.

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