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Zanganeh: OPEC Determined to Manage Crude Oil Market

Zanganeh: OPEC Determined to Manage Crude Oil MarketZanganeh: OPEC Determined to Manage Crude Oil Market

Iran said on Thursday an increase in oil prices to more than $55 per barrel was not in the interest of OPEC as it would lead to a rise in output by non-OPEC producers.

"If oil prices specifically surge over $55 or $60 per barrel, non-OPEC producers will increase their crude production to benefit the most from the price hike," Oil Minister Bijan Zanganeh was quoted by Fars news agency as saying, Reuters reported.

"OPEC is determined to reduce its production to help manage the market," he said. Benchmark Brent crude oil was trading at around $57.02 per barrel on Friday.

The Organization of Petroleum Exporting Countries agreed on Nov. 30 to cut output by 1.2 million barrels per day for the first six months of 2017, in addition to 558,000 bpd of cuts pledged by independent producers such as Russia. 

Zanganeh had previously played down the prospect of $70-per-barrel crude, adding that the rebound of US shale oil industry and the prospect of higher production by other producers will offset the gains in crude prices.

OPEC Secretary-General Mohammad Barkindo said this week that January data showed conformity from participating OPEC nations with output curbs had been above 90% and oil inventories would decline further this year. 

Iran was exempted from the production cut as Tehran argued its output should be allowed to recover after the lifting of international sanctions in January last year. Under the deal, Tehran is allowed to pump around 3.8 million barrels per day in the first six months of the year. 

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