Opec members to discuss oil output freeze in Algeria meeting

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OPEC members, led by Saudi Arabia and other big Middle East crude exporters, such as Iran and Iraq, will meet non-OPEC producer Russian Federation on the last day of the International Energy Forum, which will be held in Algeria Monday through Wednesday.

Members of the Organization of the Petroleum Exporting Countries will meet on the sidelines of the International Energy Forum in Algeria from September 26-28, where they will discuss a possible output-limiting deal.

Saudi Arabia doesn't anticipate any decision about supply when Opec members meet Wednesday in Algiers, according to an Opec delegate familiar with the country's policy.

"The disagreement took place among midlevel officials from Saudi Arabia, Iran, Qatar and Algeria meeting at OPEC's headquarters in Vienna". The Algerian oil minister said this month that OPEC would need to reduce supply by around 1 million barrels per day to help rebalance the market.

OPEC's price war may now have reached its natural conclusion, because the group has little to gain from seizing an even greater share of the global oil market, according to Bank of America Merrill Lynch.

"Saudi Arabia is ready to freeze production at the January level", Boutarfa said, calling the offer "an interesting step". "We expect there will be a pre-agreement".

Lower equity prices on Wall Street and other world stock markets was another bearish factor.

Russian Federation agrees that Iran should be offered an exception to the deal as it restores the strength of its oil industry. The market finished the week under heavy selling pressure with oil prices dropping almost 4 percent on Friday, paring weekly gains, on a report that Saudi Arabia did not expect an agreement at the talks in Algeria.

Oil prices are typically volatile before OPEC talks and Friday's session was tempered with caution despite market sentiment on a high this week after the United States government reported on Wednesday a third straight weekly drop in crude stockpiles.

US West Texas Intermediate rose 32 cents to $44.80 a barrel after falling $1.84, or 4 per cent, in the previous session on the New York Mercantile Exchange. "A nonbinding commitment to stabilise oil markets is possible, but it would likely lack teeth", Morgan Stanley said in a note on Monday.

Other OPEC members may also be reluctant to freeze at current levels.

So after the early run up, prices came back sharply on Friday night and ended 3% to 4% lower by the close of trading early Saturday morning, Sydney time. A surplus of 2 MMbpd looms early next year and "in such an environment, players as diverse as Iran, Russia, and Saudi Arabia would probably find common ground".