Oil Prices Fall After Iraq Wants Exemption from OPEC Limits

Oil prices fell on Monday as Iraq said it wanted to be exempt from an OPEC deal to cut production, though losses were capped by Iran saying it would encourage other members to join an output freeze.

Brent crude futures LCOc1 were down 45 cents at $51.33 a barrel by 1340 GMT. U.S. West Texas Intermediate (WTI) crude CLc1 was down 61 cents at $50.23.

Iraqi oil minister Jabar Ali al-Luaibi said Baghdad wants to be exempt from any production cut the Organization of the Petroleum Exporting Countries is aiming to achieve.

Falah al-Amiri, head of Iraqi state oil marketer SOMO, added that Iraq’s market share had been compromised by the wars it has fought since the 1980s.

“We should be producing 9 million (barrels per day) if it wasn’t for the wars,” he said.

OPEC announced plans last month to reduce its output to between 32.5 million barrels per day (bpd) and 33 million bpd, from September’s 33.39 million bpd. The group will iron out the details of how it will hit the target at its next meeting in Vienna on Nov. 30.

“A decision to cut to 33 million bpd should keep the crude price basis Brent in the $50-$60 band, not least because it shows that Saudi policy has changed, that OPEC is serious and can rise above political disagreements,” David Hufton, of consultancy PVM, said in a note.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza