Iraq will participate in OPEC oil-production cuts, al-Abadi says

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Iraq will participate in OPEC oil-production cuts, al-Abadi says

Although a good number of OPEC member countries have made their statements as a show of support in a potential oil production freeze, OPEC member countries such as Iraq and Iran have made it clear that they would not be agreeing to an output cut being imposed in the production of their countries.

But, prices fell, with US futures down $1 a barrel, following reports the 14-member cartel would defer a decision on a deal until the November 30 meeting due to the opposition of Iran and Iraq.

The lack of agreement, with just a week before ministers from the Organisation of Petroleum Exporting Countries and representatives gather in Vienna, leaves open the possibility the group fails to implement the curbs first outlined in late September.

Prices on November 22 were boosted by comments from a Nigerian official attending an OPEC technical meeting, which is trying to hammer out details of a deal, that it was likely all countries would be "on board" by the end of November 22.

Former worldwide sanctions could also cause Iran to balk at any OPEC oil production cut plans.

OPEC agreed on September 28 in Algiers to reduce output to 32.5 million to 33 million barrels a day. On Friday, the Saudis postponed an upcoming meeting with non-OPEC members over disagreements on how to share the burden of oil production cuts. "For us it will actually mean to reduce production to 200-300 thousand barrels per day (in 2017)", said the Russian Energy Minister Alexander Novak. Sources close to the negotiations say the producer group is looking to cut production by as much as 4.5%, with Libya and Nigeria being exempted from the deal. For most nations, this reduction would be based on the OPEC secretariat's assessment of the level they pumped in October, they said. Iran is boosting production and Iraq is seeking an exemption because of its war with Islamist militants. It was unclear whether the countries would accept these terms, which are yet to be presented to their oil ministers.

"As oil makes up for more than 90 percent of Iraq's budget, a huge hole was knocked in the budget by the fall in prices right at the same time as we have had to increase spending on the army due to the fight against IS", Jaafari told reporters during an official visit in Budapest. Since it returned to the market following sanctions its production levels have been at record highs.

US West Texas Intermediate (WTI) crude rose nine cents to US$48.05. President Vladimir Putin said this month that Moscow was ready to freeze output.

A strong dollar, trading near the 13 1/2-year peak hit last week, also weighed on prices amid thin trading ahead of the U.S. Thanksgiving holiday on Thursday. That remains the main proposal being considered, Nigeria's Waya said.

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