Oil prices rose on Wednesday after Iraq’s prime minister said the Opec producer was willing cut some of its own production, smoothing the way to a supply deal when the 14-member cartel meets in Vienna next week.
Haider Al-Abadi said Iraq would “shoulder responsibility” for some of the planned reductions of the group’s output to bolster the oil price, according to comments carried by Reuters.
The price of Brent crude, the international benchmark, increased 20 cents to $49.28 a barrel – off an earlier low of $48.56 a barrel. West Texas Intermediate, the US marker, rose 25 cents to $48.27 a barrel, from a low of $47.40.
A preliminary agreement was reached in September in Algiers to reduce output in an effort to speed the end of a two-year old supply glut and bolster prices, but some crucial details, including individual country allocations, are still to be ironed out ahead of the meeting on Wednesday.
Over the past several weeks Iraq has proved to be an obstacle to any final deal. It has questioned the figures from which any production cut will be calculated and believes it should also be exempt – like Libya and Nigeria – after years of war.
While Mr Abadi’s comments were light on detail, they have raised the chance of Iraq consenting to cuts and supporting an agreement to reduce output next week.
Iran, which will not cut but freeze production as it recovers after years under western sanctions, has also disputed numbers used to calculate its own production. Opec kingpin Saudi Arabia has indicated it may be willing to give Iran some flexibility but still wants it to agree to at least some restrictions.
Separately the US department of energy said crude stockpiles unexpectedly fell last week by 1.3m barrels, compared with analysts’ expectations for an increase of 671,000 barrels. Stocks at the Cushing, Oklahoma, delivery hub dropped by 87,000 barrels, the Energy Information Administration said.
Strength in the dollar weighed on dollar-priced commodites, however, with the US currency hitting a new 13-year high against a basket of currencies.