Iran Satisfied With June Oil Cut Adherence
July 5, 1999 - 0:0
DUBAI OPEC member Iran expects oil prices to continue on an upward trend following close adherence in June to pledged production cuts, its OPEC governor said on Sunday. Hossein Kazempour Ardebili said that 93 percent compliance in June by global producers to their agreement to cut output by two million barrels per day (bpd) would help boost prices. "We are very impressed by the level of compliance and we are confident thet producers are going to fully abide by their compliance," Ardebili told Reuter by telephone from Tehran. "Production restraint and market trends and secondary source reports prove that the rate of compliance is fully satisfactory at 93 percent," he added.
Ardebili predicted that an expected increase in demand in the third quarter coupled with continued adherence to the cuts would firm up prices. "Demand is growing while supply will remain the same. We shall witness (in July) the recovery of oil prices as targeted by OPEC," he said. "It is expected that this trend shall continue to full compliance and demand is growing," Kazempour added.
In March, OPEC and other producers agreed to the third production cut pact since last year to prop up prices after their first two attempts were undermined by quota busting. But the third time proved successful as world oil markets on Friday reached highs not seen for 18 months as dealers saw clear signs that the output limits were eating away at brimming stocks in the West. Iran's approval of June compliance comes on the heels of nearly 90 percent adherence by OPEC in May. There are signs that OPEC is eager to take further measures to reassure vulnerable markets that the group is dedicated to working towards long-term price stability.
Venezuela has asked to host a summit of OPEC heads of state in late 1999 or early next year, an idea that has drawn favorable reaction from some OPEC members. "There is a growing positive response in principle to the idea of having an OPEC summit meeting on the occasion of the change of millennium and the 40th anniversary of OPEC," an OPEC delegate told Reuter. "Consultations will continue to come up with an agenda and objectives.
OPEC has to work out a framework of cooperation on the future given the interdependency (now)," the delegate added.
Ardebili predicted that an expected increase in demand in the third quarter coupled with continued adherence to the cuts would firm up prices. "Demand is growing while supply will remain the same. We shall witness (in July) the recovery of oil prices as targeted by OPEC," he said. "It is expected that this trend shall continue to full compliance and demand is growing," Kazempour added.
In March, OPEC and other producers agreed to the third production cut pact since last year to prop up prices after their first two attempts were undermined by quota busting. But the third time proved successful as world oil markets on Friday reached highs not seen for 18 months as dealers saw clear signs that the output limits were eating away at brimming stocks in the West. Iran's approval of June compliance comes on the heels of nearly 90 percent adherence by OPEC in May. There are signs that OPEC is eager to take further measures to reassure vulnerable markets that the group is dedicated to working towards long-term price stability.
Venezuela has asked to host a summit of OPEC heads of state in late 1999 or early next year, an idea that has drawn favorable reaction from some OPEC members. "There is a growing positive response in principle to the idea of having an OPEC summit meeting on the occasion of the change of millennium and the 40th anniversary of OPEC," an OPEC delegate told Reuter. "Consultations will continue to come up with an agenda and objectives.
OPEC has to work out a framework of cooperation on the future given the interdependency (now)," the delegate added.