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Venezuela, Iran agree to call for OPEC, non-OPEC heads of state summit

9 December 2016 12:18 (UTC+04:00)
Venezuela, Iran agree to call for OPEC, non-OPEC heads of state summit

By Gulgiz Muradova

Venezuela, the country suffering the most from low oil prices, and Iran, which seeks to reach its pre-sanction level of output, have agreed to call for a summit of heads of state from OPEC and non-OPEC countries.

Venezuelan President Nicolas Maduro stated that he had agreed with the Islamic Republic to call for such a summit in the first quarter of next year to decide on strategy for the oil market.

"I told President (Hassan) Rouhani, let's jointly call for an OPEC summit of presidents, heads of state and governments in the first quarter of 2017 to establish a new mechanism for markets and oil prices and we agreed to do that, inviting non-OPEC countries and President Putin," Reuters reported citing Maduro as saying.

The president did not provide further details. Maduro earlier held intensive talks with OPEC and non-OPEC states to convince them in necessity of joint effort to stabilize the oil market.

Venezuela, reeling under a brutal recession, has for years been pushing for measures to boost prices for oil.

World oil prices are rising ahead of the meeting of OPEC and non-OPEC countries to agree to add an output cut of 600,000 bpd in Vienna on December 10.

The price of February futures for Brent crude oil rose by 0.41 percent and stood at $54.11 per barrel as of 01:16 EST. This is while the price of January futures for West Texas Intermediate (WTI) oil increased by 0.73 percent to $51.21 per barrel.

The cartel has invited 14 non-OPEC countries to the meeting in Vienna. The invited countries are Russia, Mexico, Oman, Kazakhstan, Bahrain, Colombia, Congo, Egypt, Trinidad and Tobago, Turkmenistan, Azerbaijan, Bolivia, Brunei and Uzbekistan.

Only Azerbaijan, Kazakhstan, Oman, Mexico and Russia have agreed so far to meet the group on December 10 for talks aimed at widening a deal to reduce output.

OPEC agreed its first oil output cuts since 2008 on November 30 after the major rivals within the cartel - Iran and Saudi Arabia - set aside differences to forge the cartel's first deal with non-OPEC Russia in 15 years.

Saudi Arabia accepted "a big hit" on its output and Iraq, OPEC's second-largest producer also agreed to curtail its booming output, while Iran was permitted a token increase as it recovers from nuclear-related sanctions.

The OPEC deal aims to reduce production by 1.2 million barrels a day, or about 1 percent of global output. Russia has also agreed to trim production - by about 300,000 barrels a day. The cuts take effect from January 1, 2017 and will last for six months.

Meanwhile, supply from OPEC increased to 34.19 million barrels per day (bpd) in November from 33.82 million bpd in October.

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