In its third flip-flop position on joining OPEC production cuts in as many days, Iraq signaled on Wednesday that it could be willing to cut its production and support OPEC’s efforts to reduce the glut and prop up prices.
“What we lose in lowering production we will gain in oil revenues. Our priority is to raise the price of a barrel of crude,” Iraq’s Prime Minister Prime Minister Haider al-Abadi said, as quoted by Reuters.
Following the latest Iraqi comment on the OPEC deal and the EIA report of a 1.3-million-barrel decline in crude oil stockpiles for the week to November 18, oil prices erased earlier losses and were trading almost flat as of 11:25 AM (EST).
Last Sunday, Iraqi oil minister Jabbar al-Luaibi said his country would be putting up three new proposals for discussion at OPEC’s technical meeting in Vienna this past Monday and Tuesday. No details were given on what those proposals may have been, but whatever they were, they were clearly not supported by other OPEC members.
Iraq and Iran – the cartel’s number two and three biggest producers and the most adamant opposition for the “all except Libya and Nigeria cut” proposal – continued to question their contribution to OPEC cuts on Tuesday, and the technical talks fell through with no particular result or decision made. Apart from, as Bloomberg reports, deferring the decision for Iraq and Iran until the real OPEC summit with oil ministers on November 30. Related: OPEC’s Matrix: If 1 Million Bpd Are Cut, Oil Will To Rally To $59
Next week, OPEC will be discussing all members except Nigeria and Libya cutting by between 4 percent and 4.5 percent of their output, Reuters reports, quoting OPEC sources.
Today’s remarks by the Iraqi prime minister could be interpreted as a sign that Iraq may have started to change its mind on production cuts, after seeing that other members may not be lenient enough to allow the Iraqi’s plea for an exemption on the grounds that it is fighting Islamic State. Or they could just be another hollow comment in the crowded OPEC-related rhetoric in recent weeks. After all, Iraq (and all OPEC and non-OPEC producers) has an entire week ahead to continue playing the oil markets until November 30.
By Tsvetana Paraskova for Oilprice.com
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