Oil: Iran more willing to work towards a deal to cap production and prop up prices - RBS
|Research Team at RBS, notes that the oil popped up ~3% yesterday morning after media outlets reported that Iran might be more willing to work towards a deal with other oil producers to cap production and prop up oil prices.
Key Quotes
“Iran has reportedly agreed to participate in an informal OPEC meeting in Algeria next month. This seems reminiscent of similar episodes in April and June, when optimism about a potential production cap led oil higher heading into the respective OPEC meetings. In both cases those meetings failed to deliver on the market’s heightened expectations. However, optimism might be slightly more justified this time around.
Iran is reportedly reaching presanction capacity, which might make them more open to freezing production somewhere near its current level, versus earlier this year when production was still ramping up. The next official OPEC meeting is scheduled for the end of November and we expect oil markets to react positively to any headlines between now and then that suggest a deal might be materializing.”
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