Confused OPEC Watchers Are More Divided Than Ever
To understand just how contentious next week’s OPEC meeting will be, take a look at the confusion it’s created among professionals paid to predict the outcome.
The 20 analysts surveyed this week by Bloomberg are perfectly divided, with half forecasting the Organization of Petroleum Exporting Countries will cut supply on Nov. 27 in Vienna to stem a plunge in prices while the other half expect no change. In the seven years since the surveys began, it’s the first time participants were evenly split. The only episode that created a similar debate was the OPEC meeting in late 2007, when crude was soaring to a record.
The split now reflects the difficult choice OPEC nations have to make. They could cut output to revive crude prices from a four-year low, at the risk of losing more market share to rival suppliers, including U.S. shale drillers. Or they could do nothing and allow prices to fall low enough to deter growth in U.S. output, a move that would also squeeze the finances of poorer members like Venezuela and Nigeria. With half the analysts in the market headed for a surprise, prices will be volatile after the meeting, according to BNP Paribas SA.
“It’s going to be a critical day,” Doug King, chief investment officer of the $200 million Merchant Commodity Fund, said by phone from London Nov. 14. “If there’s no action from the meeting, one of the most important OPEC meetings in the last 10 to 15 years, then the market will test them on the downside. If they cut 1.5 million barrels a day, you could get the Brent market back up into the $80 to $90 range.”
Output Decision
Oil collapsed into a bear market last month as U.S. drillers pumped at the fastest pace in more than three decades and global demand growth slowed. OPEC, responsible for about 40 percent of global oil output, needs to reduce production by 1 million to 1.5 million barrels a day to better balance supply and demand, Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas, said by e-mail from London on Nov. 11.
The group faced the opposite situation when analysts were at odds about OPEC’s intentions seven years ago. Brent futures had climbed about 55 percent in the 11 months up to the December 2007 meeting, putting pressure on the group to increase its production target. At the same time, the U.S. economy was on the verge of its worst recession since the 1930s, following a collapse in the housing market.
Before the meeting on Dec. 5, 2007, 23 of 42 people surveyed by Bloomberg predicted OPEC would maintain its production target, while the others forecast an increase of between 500,000 and 750,000 barrels a day. On the day that the group decided to maintain output, Brent crude futures slumped as much as 1.9 percent, before settling 1.2 percent higher.
Trashed Market
“If OPEC does nothing, I think we’re seeing this market get really trashed, another $10 from where it is,” Hakan Kocayusufpasaoglu, chief investment officer at Archbridge Capital AG, a Zug, Switzerland-based hedge fund, said by phone Nov. 14. Brent crude futures for January settlement closed yesterday at $79.33 a barrel on the ICE Futures Europe exchange in London.
The group’s decision is made more difficult by the size of the supply cut needed to offset growth in production outside OPEC, Kocayusufpasaoglu said. “They’re going to have to cut 2 million barrels a day over time,” he said. “That’s a lot of money to leave on the table.”
U.S. crude production will surge 800,000 barrels a day to a 43-year high of 9.4 million in 2015, adding to 1.1 million barrels a day of growth projected for this year, the Energy Information Administration said on Nov. 12.
Bakken Formation
Back in 2007, production of oil from shale rock formations that’s driving the current boom had barely started. North Dakota’s Bakken formation, one of the biggest shale oil producers in the U.S., pumped just 33,000 barrels a day in December 2007, barely 3 percent of the 1.12 million barrels a day it produced in September, data from the North Dakota Industrial Commission shows.
There’s only a “remote possibility” OPEC will agree to a cut in Vienna, Seth Kleinman, Citigroup Inc.’s head of European energy research, said in a report on Nov. 10. Members including Algeria, Nigeria and Venezuela are unwilling to reduce their own production while Saudi Arabia, the group’s biggest producer, will refuse to do so alone, he said.
Saudi Arabia plans to let U.S. shale producers be the first to cut in the face of slumping prices, Jeffrey Currie, head of commodities research at Goldman Sachs Group Inc., said in an interview with Bloomberg Television on Nov. 13.
Below $80
“With prices below $80, and the recent signal that the Kingdom is doing what it can with other producers to ensure stability, the market should not rule out an OPEC cut entirely,” Amrita Sen, chief analyst at London-based consultants Energy Aspects Ltd., said in a report on Nov. 17. “But predicting the timing of the cut is more challenging.”
Saudi Arabia is committed to seeking a “stable” oil price and speculation of a battle between crude producers “has no basis in reality” Oil Minister Ali Al-Naimi said at a conference in Acapulco, Mexico, on Nov. 12.
Even the group’s richest members would struggle to endure a year of $70 oil, which would be required to “dent” North American output, Tchilinguirian said.
Of the 10 analysts anticipating no formal change from OPEC on Nov. 27, three said it would pledge to bring output in line with the current target of 30 million barrels a day. The group would need to trim about 250,000 barrels from the 30.25 million a day it pumped in October, data from the organization shows.
Trimming Output
Ecuador and Venezuela will ask OPEC members in Vienna to trim production above this target, an official from Ecuador, who asked not to be identified in accordance with government policy, said on Nov. 18.
“Either OPEC disappoints the market by not cutting and prices fall, or OPEC makes a decisive cut that should allow prices to recover,” Tchilinguirian said. “The OPEC meeting will have binary outcome on oil prices. In other words, the price cannot stay where it is.”
For Related News and Information: Oil Price Plunge Tells Morgan Stanley OPEC Action Is More Likely Oil Diplomacy Takes New Twist as Venezuela Seeks Non-OPEC Help Hedge Funds Boosted Brent Oil Bull Bets Just Before Slump to $80 Saudi Arabia Leads OPEC Crude Output Lower Before Meeting
Yen Climbs on Aso Comments as Oil Gains; Asia Stocks Drop
Japan’s yen rose for the first time in seven days as Finance Minister Taro Aso said its decline has been too fast. Most Asian stocks fell, with the regional index headed to its biggest weekly retreat since mid-October, while crude oil climbed for a second day.
The yen added 0.4 percent to 117.77 per dollar by 12:16 p.m. in Tokyo, paring its biggest five-week loss since 1995. About five stocks fell for every three that rose on the MSCI Asia Pacific Index (MXAP) as it headed for a 1.8 percent drop this week. Standard & Poor’s 500 Index futures were little changed after the gauge rose to a record. The won climbed 0.3 percent from an almost 15-month low. Oil in New York added 0.6 percent and is heading for its first weekly gain since September.
Asian equities retreated this week as data showed the region’s two largest economies struggling, with Japan falling back into recession and Chinese factory activity at a six-month low. The yen is the worst-performing major currency versus the dollar this month after Japan’s central bank boosted record stimulus and Prime Minister Shinzo Abe shelved plans for a sales-tax increase. Analysts polled by Bloomberg are split on if Organization of Petroleum Exporting Countries members will cut supply on Nov. 27
“The dollar has gone up so quickly, close enough to the next big round number to encourage profit taking, but it still feels like it’s in a rising trend since Oct. 31,” Greg Gibbs, the head of Asia-Pacific markets strategy at Royal Bank of Scotland Group Plc in Singapore. “The market will search for the right levels to buy again. It’s purely technical, unrelated to any economic news.”
Dollar Gains
The dollar rose to 118.98 yen yesterday, the strongest level since Aug. 9, 2007. That took gains to more than 11 percent since the close on Oct. 17, the last time the U.S. currency finished a week lower against the yen.
The greenback has benefited from a U.S. economy that has strengthened enough for the Federal Reserve to end its dollar-debasing bond-buying program and consider the timing of its first interest-rate increase since 2006. That contrasts with Japan and the euro region, where officials are battling deflation with further stimulus policies amid record-low interest rates.
The Topix index retreated 0.8 percent and is heading for its first weekly decline since Oct. 24. Just five of the 33 industry groups on the gauge advanced today. The Nikkei 225 Stock Average, the best-performing major index this quarter among 24 developed nations monitored by Bloomberg, is down 2 percent this week.
Abe will dissolve the lower house of parliament today for the vote to be held in mid-December. His cabinet will resign as part of procedures required in advance of the election.
Crude Rebound
The Hang Seng Index added 0.2 percent, paring its drop since Nov. 14 to 2.9 percent, with a gauge of Chinese shares listed in Hong Kong little changed. The benchmark index’s biggest weekly loss since March coincided with the launch of a trading link between the southern city’s bourse and its counterpart in Shanghai.
Oil futures advanced as much as 0.8 percent in London and 1.3 percent in New York. West Texas Intermediate crude contracts fell 30 percent from a closing high on June 20 through yesterday.
Half of the 20 analysts surveyed this week by Bloomberg forecast OPEC will cut supply at its Vienna meeting to stem a plunge in prices while the other half expect no change. In the seven years since the surveys began, it’s the first time participants were evenly split. The only episode that created a similar debate was the OPEC meeting in late 2007, when crude was soaring to a record.
U.S. crude climbs towards $77 on strong U.S. data
SINGAPORE Nov 21 (Reuters) - U.S. crude climbed towards $77 a barrel in Asian trade on Friday following strong U.S. economic data overnight and mounting speculation oil ministers could agree production cuts at next week's OPEC meeting.
FUNDAMENTALS
* U.S. crude futures for January delivery rose 60 cents to $76.46 a barrel as of 0111 GMT after closing up $1 in the previous session. The benchmark touched a high of $76.80 in early Asian trade and is on course to snap a seven-week losing streak.
* Brent crude for January delivery climbed 60 cents to $79.93 after settling up $1.23 in the previous session.
* Upbeat U.S. economic data included a business activity index which jumped to its highest level in 21 years, and home resales which rose to an annual rate of 5.26 million units, the highest rate since September 2013.
* U.S. jobless claims fell less than expected to a seasonally adjusted 291,000 last week, but claims have now been below the 300,000 threshold for 10 straight weeks, a sign that the labor market is strengthening.
* Venezuela would be willing to cut oil output if OPEC agrees to production cuts at the oil cartel's meeting on Nov. 27, its Foreign Minister said on Thursday. Venezuela, Libya and Ecuador have previously called for OPEC to cut production at the meeting to shore up oil prices which have fallen to four year lows.
* The deadline to reach agreement over Iran's nuclear programme could be extended to March amid sharp disagreements between Tehran and six world powers that could scupper a deal by the Nov. 24 deadline, officials close to the talks said on Thursday.
* Iran, which exports around 1.3 million barrels per day, will double oil exports within two months if sanctions over Tehran's nuclear programme are lifted, Oil Minister Bijan Zanganeh told official news agency IRNA.
* Russia warned the United States on Thursday against supplying arms to Ukrainian forces fighting pro-Russian separatists in eastern Ukraine.
MARKETS NEWS
* Asian shares took solace from data showing broad U.S. economic strength even as signs of spreading weakness in China and Europe checked risk appetite, while the yen nursed its losses after sliding to multi-year lows against the dollar and euro overnight.
DATA/EVENTS
* There is no major data ahead for Friday. (Reporting By Keith Wallis; Editing by Richard Pullin)
Brent Gains First Time in 4 Days as Investors Weigh OPEC
Brent and West Texas Intermediate crude gained for the first time in four days as investors weighed the potential outcome of next week’s OPEC meeting.
Leading members of the Organization of Petroleum Exporting Countries are resisting calls to reduce output while others including Venezuela seek action to support prices at a Nov. 27 meeting in Vienna. An OPEC production cut looks increasingly likely, Morgan Stanley said in a report yesterday. Brent trading volatility rose to the highest in more than two years.
“The market is eyeing next week’s OPEC meeting for some kind of movement,” said Gene McGillian, a senior analyst at Tradition Energy in Stamford, Connecticut. “OPEC needs to take action and make the cuts. The market is still under pressure but we are close to the bottom.”
Brent for January settlement gained $1.23, or 1.6 percent, to end at $79.33 a barrel on the London-based ICE Futures Europe exchange. Total volume of all futures was 21 percent below the 100-day average. Front-month prices have decreased 28 percent this year.
Implied volatility for at-the-money front-month Brent options, a measure of expected futures movements and a key gauge of options value, rose to 32.23 percent yesterday, the highest level since July 2012, according to data compiled by Bloomberg. Volatility was 31.23 percent today.
WTI for January delivery, the most-actively traded, rose $1.35, or 1.8 percent, to $75.85 a barrel on the New York Mercantile Exchange. The December contract, which expired today, climbed $1 to $75.58. The European benchmark crude traded at a premium of $3.48 to WTI for the same month on ICE, compared with $3.60 yesterday.
Bear Market
Oil collapsed into a bear market as OPEC production rose and the U.S. pumps at the fastest rate in more than three decades. OPEC pumped 30.97 million barrels a day in October, exceeding its collective output target of 30 million barrels a day for a fifth straight month, data compiled by Bloomberg show.
The 12-member group should cut output by 500,000 barrels a day, Libya’s OPEC governor Samir Kamal said yesterday.
“OPEC needs to get everybody on board,” said Kyle Cooper, director of commodities research at IAF Advisors in Houston. “It’s going to be a battle. I don’t see who is going to cut. The market is just going to bounce around before the meeting.”
Iran Talks
U.S. Secretary of State John Kerry will today join envoys from six world powers and Iranian counterparts for intensive talks on the country’s nuclear program. Iran won’t cut its oil output by a single barrel, said the country’s Oil Minister Bijan Namdar Zanganeh.
“Under no circumstance will Iran decrease its share of the global market, not even by one barrel,” Zanganeh said in TV interview, according to ministry’s news website Shana.
Zanganeh said he will discuss oil market share with Saudi Arabia, OPEC’s largest producer, in Vienna on Nov. 26, the day before the group’s meeting, according to a report from the official Islamic Republic News Agency, citing the same TV interview.
Crude also gained on speculation stronger economic growth in the U.S. will increase demand. Existing homes sold at a 5.26 million annual pace in October, the strongest since September 2013 and up 1.5 percent from a revised 5.18 million pace in September, the National Association of Realtors reported today.
The Conference Board’s index of U.S. leading indicators, a gauge of the outlook for the next three to six months, climbed 0.9 percent last month, the most since July, after rising 0.7 percent in September, the New York-based group said today.
Refinery Runs
“The economy looks good, and when the economy is good, demand rises,” said Carl Larry, a Houston-based director of oil and gas at Frost & Sullivan. “Strong refinery runs are going to keep oil supported.”
Demand for gasoline climbed to 9.19 million barrels a day last week, the most since Aug. 29, the Energy Information Administration reported yesterday.
Regular gasoline prices averaged $2.85 a gallon nationwide yesterday, the lowest since November 2010, according to AAA.
U.S. refineries operated at 91.2 percent of capacity last week, the most since Sept. 19, the EIA said.
Natural Gas Rises to 5-Month High on Heating-Fuel Demand
Natural gas futures rose in New York to the highest price in almost five months as a blast of arctic air spurred heating-fuel demand.
Prices alternated between gains and losses before ending the session up 2.7 percent. The government’s Global Forecast System midday update showed that temperatures will be below normal in the eastern U.S. next week before moving closer to seasonal norms Nov. 30 through Dec. 4, according to Frontier Weather Inc. Gas demand this week jumped to an eight-month high as temperatures tumbled, according to LCI Energy Insight data.
“A very cold start to the winter has resurfaced repressed market memories of last winter, with fickle short-term weather forecasts supporting the ongoing tug-of-war in natural gas prices,” said Teri Viswanath, director of commodities strategy at BNP Paribas SA in New York. “While the midday model runs showed a slightly warmer version of the 11- to 15-day forecast period, there appears sufficient cold weather to entice buyers.”
Natural gas for December delivery rose 11.8 cents to settle at $4.489 per million British thermal units on the New York Mercantile Exchange, the highest close since June 25. Prices rose to $4.503 and dropped to $4.25 during the session. Volume for all futures traded was more than double the 100-day average at 3:48 p.m. Prices are up 22 percent from a year ago.
Price Retreat
Gas retreated during the session as futures faced resistance in the $4.50 range, said Ellen Stamm, global natural gas analyst at Schneider Electric in Louisville, Kentucky. It will take colder weather to break through that level, she said.
December $4.75 calls were the most active options in electronic trading, falling 0.6 cent to 2.3 cents on volume of 2,341 as of 3:48 p.m.
The weather model for the 11- to 15-day period “averages a couple degrees warmer than normal for just about everywhere east of the Rockies except for the Northeast, which averages nearer to normal,” said Jim Southard, meteorologist with Frontier in Tulsa, Oklahoma.
The expected temperature range in St. Louis on Dec. 2 is now 43 degrees Fahrenheit (6 Celsius) to 51, up from the previously forecast range of 34 to 41, he said.
The noon model showed no significant changes in the forecast for the next week, Southard said. A surge of polar air from Canada will push from the Great Plains to Florida Nov. 25 through Nov. 29, with the Midwest seeing the strongest intensity of the cold, according to MDA Weather Services in Gaithersburg, Maryland. About 49 percent of U.S. households use gas for heating.
Inventory Report
“This is an earlier cold snap and when they have to eat into storage earlier than they expected, that can make the market a little bit nervous,” Chris Ellsworth, fuel branch chief with the Federal Energy Regulatory Commission’s office of enforcement.
Gas stockpiles fell 17 billion cubic feet in the week ended Nov. 14 to 3.594 trillion, topping the five-year average decline of 10 billion for the period, the U.S. Energy Information Administration report showed. Analyst estimates showed an expected drop of 11 billion, as did a survey of Bloomberg users.
A deficit to weekly five-year average inventory levels widened to 6.4 percent from 6.2 percent the previous week, expanding for the first time since March.
Supplies were 5.3 percent below year-earlier inventories, compared with 5.7 percent in last week’s report.
Early data indicates that the stockpile decline in next week’s report will jump to 150 billion cubic feet, given the blast of arctic air sweeping most of the lower 48 states, according to Viswanath and Stamm. The five-year average drop for the seven days ending Nov. 21 is 6 billion.
Spectra Corp.’s Algonquin gas pipeline in the Northeast curtailed 50 percent of secondary nominations on the system at the end of last week and that rose to about 80 percent as it got colder this week, said Valeria Annibali, energy industry analyst at FERC’s enforcement office. That signals less gas was available for power generators as more pipeline capacity was used to serve firm contract holders, such as distribution companies for households, she said.
Pipeline data this week also showed a notable shift in gas flows, with the Marcellus shale in Pennsylvania and West Virginia meeting a bigger share of Northeast demand while Louisiana and Gulf flows stopped in the mid-Atlantic region, she said.
Gas demand jumped to 111.3 billion cubic feet on Nov. 18, the most for any day since Feb. 11, data show from LCI Energy in El Paso, Texas. Gas deliveries for the next day jumped to a seven-month high of $10.78 per million Btu on the day-ahead market on the Intercontinental Exchange. Algonquin prices today closed at $5.87.
“You expect prices like that in the depths of winter,” Ellsworth said.
LNG Plant Goes Against Australian Export Flow to Fuel Miners
In the shadow of $60 billion in Australian liquefied natural gas export projects, a plant supplied by BG Group Plc (BG/) is going against the flow by starting production this month for the domestic market.
Instead of supplying huge Asian utilities, the “micro-LNG” plant in southern Queensland state is targeting customers in the trucking, mining and industrial sectors that want to replace diesel fuel with less-polluting LNG.
The plant, operated by BOC, part of Germany’s Linde AG (LIN), has contracts to sell more than half its capacity, Alex Dronoff, general manager of LNG at the unit, said by phone. The company is considering building another plant at the Queensland site, Dronoff said.
“Everybody just thinks about the export plants,” Dronoff said. “The LNG we produce doesn’t go offshore. It’s reduces reliance on imported diesel.”
Australia is forecast to surpass Qatar this decade to become the world’s biggest LNG exporter with $60 billion of mega projects in Queensland coming on stream. Manufacturing Australia, an industry group, said this year that “unrestricted” LNG exports are boosting domestic prices and hurting local gas consumers.
The BOC plant has a capacity of 50 metric tons of LNG a day, enough to supply as many as 200 trucks, and has contracts with customers including Nestle SA and remote mines for power generation, Dronoff said. BG’s Australian unit, QGC Pty, signed an agreement in 2010 to feed coal-seam gas to BOC.
While a falling oil price reduces the incentive to switch from diesel, “there is opportunity in Australia to look at how gas might be deployed into meeting” demand from the transport and mining industries, John Young, an analyst at Ord Minnett Ltd., said by phone. “That could be in the form of micro-LNG or compressed natural gas,” he said.
The BOC project is estimated to cost more than A$200 million ($172 million) over its life, Dronoff said.
Oil Climbs as Analysts Divided on OPEC Output Cut Before Meeting
Brent and West Texas Intermediate headed for their first weekly advance since September as analysts remain divided on whether OPEC will reduce production to prop up prices that are in a bear market.
Futures advanced as much as 0.8 percent in London and 1.3 percent in New York. Half of the twenty analysts surveyed by Bloomberg News this week forecast the Organization of Petroleum Exporting Countries will cut output while the other half expect no change. An OPEC sub-committee affirmed the group’s estimate that demand for its crude will be lower next year, officials who attended the meeting said.
Oil has dropped about 30 percent from a June peak as the U.S. pumps at the fastest rate in more than three decades amid signs of weakening demand. Leading OPEC members are resisting calls to decrease supply while others including Venezuela seek action to support prices before a Nov. 27 meeting in Vienna.
“It’s the countdown to the OPEC meeting,” Jonathan Barratt, the chief investment officer at Ayers Alliance Securities in Sydney, said by phone. “There are certainly differing views within the group. Those that want cuts and those that don’t. Saudi Arabia will try and protect its market share through discounted sales, there is a price war.”
Brent for January settlement climbed as much as 67 cents to $80 a barrel on the London-based ICE Futures Europe exchange and was at $79.80 at 9:46 a.m. in Singapore. The volume of all futures traded was about 35 percent above the 100-day average. Prices are up 0.5 percent this week.
OPEC Output
WTI for January delivery increased as much as 95 cents to $76.80 a barrel in electronic trading on the New York Mercantile Exchange. December futures expired yesterday after rising $1 to $75.58. Front-month prices have climbed 0.8 percent this week. The U.S. contract was at a discount of $3.35 to Brent, compared with $3.59 on Nov. 14.
Saudi Arabia, the biggest producer in the 12-member group, may be shifting focus to defend its market share, Bank of America Corp. said in a note yesterday. The kingdom may prefer lower and more volatile oil prices in order to discourage investment in North American shale output, it said, predicting OPEC may trim its target by no more than 500,000 barrels a day.
In the seven years since Bloomberg began surveying analysts before on OPEC meetings, it’s the first time participants were evenly split. The only episode that created a similar debate was in late 2007, when crude was soaring to a record.
OPEC, which supplies about 40 percent of the world’s oil, pumped 30.97 million barrels a day in October, data compiled by Bloomberg show. That exceeded its collective production target of 30 million a day for a fifth straight month.
Iran will protect its share of global sales and can double exports in two months if sanctions are removed, Oil Minister Bijan Namdar Zanganeh said, according to the ministry’s news website Shana.
Iran Vows to Defend Oil-Market Share as OPEC to Review Output
Iran will protect its share of global crude sales under all circumstances, Oil Minister Bijan Namdar Zanganeh said, as OPEC members prepare to meet next week to review production levels.
The Persian Gulf nation can double oil exports in two months if sanctions against are removed, Zanganeh said, according to the ministry’s news website Shana.
The Organization of Petroleum Exporting Countries will gather on Nov. 27 in Vienna to assess its collective output amid a supply glut and a 30 percent drop in prices this year. Iran’s crude output has languished under international economic sanctions that deter foreign energy investors and limit its exports to approximately 1 million barrels a day.
“Under no circumstance will Iran decrease its share of the global market, not even by one barrel,” Shana cited him as saying.
OPEC producers are stepping up diplomatic visits before their meeting, discussing how to react to the plunge in oil prices to a four-year low. Saudi Arabia, the group’s biggest member, remains committed to seeking stable prices, Saudi Oil Minister Ali Al-Naimi said Nov. 12 in Mexico. Rafael Ramirez, Venezuela’s OPEC representative, visited Algeria, Qatar, Iran and Russia. Zanganeh traveled to the United Arab Emirates, Qatar and Kuwait.
OPEC members Libya, Venezuela and Ecuador have called for action to prevent crude from tumbling further. Brent crude futures fell to less than $78 a barrel yesterday in intra-day trading in London.
Lost Sales
Iran, which produced more than 4 million barrels a day in 2008, lost market share to other producers amid sanctions imposed to curb its nuclear program. It pumped 2.77 million barrels a day in October, according to data compiled by Bloomberg. The nation could boost output by 700,000 barrels a day within two months of the removal of sanctions, Zanganeh told reporters at the last OPEC meeting in Vienna in June.
“I don’t expect to see much more Iranian oil returning to the market in 2015,” Richard Mallinson, a London-based analyst at Energy Aspects Ltd., said by e-mail yesterday. “Iran faces technical challenges increasing output and needs foreign investment and expertise.”
The U.S. and allied countries are concerned that Iran may be seeking to develop technology to build nuclear weapons, an accusation Iran denies. The sanctions, which target Iran’s energy and financial services industries, include a European Union ban on imports of Iranian crude.
The Islamic republic and six world powers are negotiating to reach an agreement that would limit Iran’s nuclear program in return for an end to sanctions. The deadline for the talks is Nov. 24, three days before OPEC’s meeting.
Zanganeh said countries in the southern Persian Gulf “are eager to maintain their market share, and a loss of market share is problematic for them,” according to the official Islamic Republic News Agency. OPEC members in the southern Gulf include Saudi Arabia, Kuwait, Qatar and the U.A.E.
“Zanganeh noted that in Vienna he will talk to Saudi officials about this matter on Wednesday,” IRNA reported.
