A senior Iranian oil official said there was enough crude in the market and no need for the Organisation of the Petroleum Exporting Countries to hike output, the Oil Ministry's website reported on Wednesday. Oil prices have tumbled from a record peak of $147 a barrel in July but have climbed off recent lows of $112 a barrel over supply concerns, in particular because of a storm in the Gulf of Mexico that traders worry could hurt oil and gas output there.
Benchmark light crude is trading at around $117 a barrel. "The market has enough crude oil and more crude than is needed is being supplied to the market, therefore there is no need to increase Opec's production ceiling," Ali Asghar Arshi told the Oil Ministry's news website SHANA.
Arshi is the executive director for international affairs at state-owned National Iranian Oil Company. Gholamhossein Nozari, oil minister of Opec's No 2 producer, said on Monday he expected Opec to work on preventing a falling trend in crude prices and to study oversupply in the market when it meets in September. Arshi said prices were unlikely to fall much further than they had done recently because it was now the season for higher demand, in particular for heavy crude.
The possibility of more storms in the Gulf of Mexico could push oil prices higher again if output there was damage, he said. He also pointed to deteriorating security in the main oil producing area of Nigeria, another Opec state. "If these tensions (in Nigeria) worsen, it is unlikely that prices will go down and the other issue is the result of negotiations between Iran and the P5+1 countries, which has a determining role on crude prices," Arshi said.
Iran is embroiled in a row over its nuclear programme with the United States, Britain, France, Germany, Russia and China, the so-called P5+1. The dispute over Iran's nuclear goals tends to drive prices higher when tensions mount. Opec ministers next meet on September 9 in Vienna.