Zanganeh Says Most OPEC Members Back Extending Output Cuts

Oil Minister Bijan Namdar Zanganeh said on Monday that a majority of OPEC members support extending output cuts but a final decision will be taken at their next meeting on Nov. 30.

The Organization of Petroleum Exporting Countries, together with a group of non-OPEC producers led by Russia, has reduced output since January 1 under an agreement set to run until next March, Reuters reported.

Producers are curbing their output in hopes of supporting prices and reducing inventories. OPEC will meet at the end of the month to discuss the policy.

“A majority of members support the extension of the plan, but the final decision should be taken at the next OPEC meeting,” Zanganeh was quoted as saying by the ISNA.

OPEC allowed Iran to increase output slightly to help it recover market share lost while under sanctions. OPEC members Libya and Nigeria have also been exempt from supply curbs as their oil industries recover from years of unrest.

“If the production cut is extended, the exemption for Iran will also be extended,” Zanganeh was quoted as saying by Shana, the Iranian Oil Ministry’s news agency.

Oil markets were tepid on Monday as traders were reluctant to take on big new positions ahead of an OPEC meeting at the end of the month, when the producer club is expected to decide whether to continue output cuts aimed at propping up prices.

"OPEC meeting remains the key sector catalyst into yearend ... The market expectation is for an extension through 2018, created by OPEC comments early this fall ... but there is increased risk that OPEC delays the extension decision," US bank Morgan Stanley said on Monday in a note to clients.

Morgan Stanley said the question over extended cuts "has shifted to non-OPEC participants' willingness to extend, primarily Russia".