Iran says OPEC should decrease output

A member of Energy Commission of Iran Parliament says OPEC must decrease oil production by at least 3.5 million barrels per day to support oil price.

Jalil Jafari Boneh told Trend Nov.26 that OPEC should shrink the output to 28 million barrels per day (mb/d) to push oil price high.

12 members are preparing to hold 168th Ordinary OPEC Meeting on Dec.4 in Vienna, Austria.

According to the current quota, OPEC members have agreed on 30-mbm/d ceiling level together, however, according to the Cartel's latest monthly report, OPEC's output at October stood at 31.383 mb/d, some 256,500 barrels less than September.

However, according to OPEC's report, estimated demand for OPEC crude in 2015 remains at 29.6 mb/d, an increase of 0.6 mb/d over the previous year. In 2016, demand for OPEC crude is forecast at 30.8 mb/d, around 1.2 mb/d higher than in the current year.

Jafari Boneh said that the main problem is lacking of binding production quota, specifically for each member of OPEC. "The overall ceiling level has been set at 30 mb/d, but it is not defined that how much is the quota of each member," he said.

Iranian MP added that Saudi Arabia persists on defending its share in market, but it seems that Riyadh's decision is political rather than economical motivated.

Saudi Arabia produced 10.125 mb/d in October, 442,000 barrels per day more than 2014 average.

Jafari Boneh added that currently, OPEC members loses due to low oil price.

OPEC oil basket price has decreased from $108 per barrel in 1H14 to below $40 currently.

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