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 Iran will continue increasing oil production and exports until it
reaches the market position it enjoyed before the imposition of
sanctions, Oil Minister Bijan Zanganeh was quoted by the
semi-official Mehr news agency as saying.
Saudi Arabia, which spearheaded an initial proposal in February for
producers to limit output, said last week it would not join any
effort to do so unless Iran were on board, while Russia reported its
highest oil production in 30 years.
This has cast doubt on the ability of the world's largest exporters
to reach any such agreement when they meet this month in Doha to
discuss how best to align global supply and demand.
Hedge funds last week cut their bullish holdings of crude oil
futures for the first time in six weeks. [CFTC/]
Brent crude futures were 1 cent higher on the day at $38.68 a barrel
by 1030 GMT, around their lowest for a month, but still 40 percent
above where they were in mid-February.
U.S. crude futures were 8 cents lower at $36.71 a barrel.
"It's not very strange to see a wave of profit-taking and some
unwinding of long positions, and some people even saying they could
reposition for a move towards lower prices," ABN Amro chief energy
economist Hans van Cleef said.
"That's part of a normal cycle that I think can continue this week,
we might see $36 or $37 ... Prices are coming down because of
speculation Saudi Arabia will not join (the freeze deal) and that's
probably what we'll see over the next three weeks - more speculation
and more verbal intervention."
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Oil prices have fallen more than 65 percent since mid-2014, when
booming U.S. shale oil output and supply from within and outside
OPEC created one of the largest global surpluses of crude in modern
times.
U.S. production is proving more resilient to low oil prices than
many expected, despite steep cuts in drilling for new reserves as
well as a jump in bankruptcies.
"The current rig count implies U.S. production ... would decrease by
705,000 barrels per day yoy (year-on-year) on average in 2016, and
by 375,000 barrels per day yoy in 2017," Goldman Sachs said.
(Additional reporting by Henning Gloystein in Singapore; Editing by
Dale Hudson)
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