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Iraq Says OPEC, Others to Meet on Oil Freeze, Perhaps in May

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Major OPEC and other crude producers will meet in Russia, possibly next month, in a new push to agree on an output freeze to shore up oil prices, Iraq’s Deputy Oil Minister Fayyad Al-Nima said.

Iraq sees oil prices rising slowly despite the failure of OPEC and other producers including Russia to reach an agreement on an output freeze in Doha on April 17, Al-Nima, who assumed the duties of oil minister after Adel Abdul Mahdi suspended his participation in the cabinet last month, said in a phone interview on Wednesday. There is still no agreement on an oil meeting in May, Russian Energy Minister Alexander Novak said after Al-Nima’s comment.

“Iraq will take part in this meeting,” Al-Nima said. “Iraq’s view is to have a freeze in output for a short period to help protect the interests of both producers and consumers equally by easing the surplus from the market and improving prices.”

Talks in the Qatari capital Doha between the world’s largest producers about capping production failed after Saudi Arabia insisted it wouldn’t restrain output without commitments from all members of the Organization of Petroleum Exporting Countries, including Iran, which has ruled out freezing for now. Tensions between regional antagonists Saudi Arabia and Iran have flared as they take opposite sides in bloody conflicts in Yemen and Syria.

Price Reaction

Oil futures extended gains after the Iraqi statement. West Texas Intermediate for May delivery rose 3.8 percent to $42.63 a barrel on the New York Mercantile Exchange Wednesday, the highest settlement since Nov. 25. Brent June settlement advanced 4 percent to $45.80, also the highest close since Nov. 25.

“Revived hope about the big freeze has traders covering their shorts,” said Phil Flynn, a senior market analyst at Price Futures Group in Chicago.

Iran is seeking to boost crude production and exports after years of sanctions. The Persian Gulf country is vying for market share, which it says was captured by Saudi Arabia and other producers. Iraq is also struggling to rebuild its energy industry and regain customers lost during decades of conflict and sanctions.

Iraq’s crude production, including from fields in the semi-autonomous northern Kurdish region, is currently at a level of between 4.7 million barrels a day and 4.8 million barrels, Al-Nima said. Exports are currently 3.9 million barrels a day, including from the Kurdish region, and are due to remain at the same level in May, he said.

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