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OPEC agreed last month in Vienna to reduce output by around 1.2 million bpd from January 2017.
OPEC agreed last month in Vienna to reduce output by around 1.2 million bpd from January 2017.

OPEC, Non-OPEC Deal Imperative to Improve Prices

Rouhani says Tehran backs measures aimed at stabilizing the market that could lead to an oil price increase

OPEC, Non-OPEC Deal Imperative to Improve Prices

President Hassan Rouhani told his Venezuelan counterpart Nicolas Maduro on Thursday that members of Organization of Petroleum Exporting Countries should work together to  implement the deal reached last month to help stabilize the oil market.

"Close cooperation among OPEC and non-OPEC states is key to raising and stabilizing oil prices," Rouhani said in a telephone conversation with the Venezuelan leader on Thursday, Reuters reported, citing Iran's state TV.

"It will pave the way for implementation of deals reached during meetings in Algiers and Vienna this year," he said.

Oil traded over $50 a barrel ahead of a meeting on Saturday in Vienna between OPEC and non-OPEC producers that may result in an agreement to cut crude output further. Rouhani said Tehran backs measures aimed at stabilizing the market that could lead to an oil price increase.

Maduro said that he had agreed with Iran to call for a summit of heads of state from OPEC and non-OPEC countries in the first quarter of next year to discuss and decide strategy for the volatile oil market that has cut crude exporting countries income by more than half over the past two years.

"I told President (Hassan) Rouhani, let's jointly call for an OPEC summit of presidents, heads of state and governments in the first quarter of 2017 to establish a new mechanism for markets and oil prices and we agreed to do that, inviting non-OPEC countries and (Russian) President (Vladimir) Putin," Maduro said in a TV broadcast.

He did not provide further details.

Venezuela, reeling under a brutal recession, has for years been pushing for measures to boost prices for oil, its only major source of foreign revenue.

"Oil brokers should not be allowed by OPEC to determine crude prices ... Iran and Venezuela's cooperation can help bring crude prices to a real and fair level," Maduro said, according to state TV. Venezuela's Oil Minister Eulogio Del Pino said this week that OPEC was aiming for a moderate but not too high oil price.

  OPEC Accord

OPEC agreed last month in Vienna to reduce output by around 1.2 million bpd from January 2017, a move that bolstered crude prices.

Iran was exempted from the cut, being allowed to boost production slightly from its October level - a victory for Tehran, which has long argued it needs to regain market share lost under international restrictions.

The sanctions were eased in January under a nuclear deal reached in 2015 with six major powers aimed at curbing the country's nuclear program.

Oil producers in Vienna will see whether those outside OPEC will cut production to reduce a global supply glut that has pressured prices since 2014.

Non-OPEC countries are expected to contribute a reduction of 600,000 bpd as part of the wider agreement. Non-OPEC Russia has signaled it was ready to cut production by 300,000 bpd.

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