Opec has 'good basis' for deal: Boutarfa

Algeria's oil minister Noureddine Boutarfa said a visit to Tehran tomorrow will be part of his attempts to broker a production restraint deal among Opec members when ministers meet in Vienna on 30 November.

He expressed optimism that a deal can be reached, saying this week's meeting of a high-level technical committee had adopted an Algerian proposal that "we believe is a good, balanced proposal and reflects the concerns of all parties."

He said the proposal, which he did not detail, "represents a good basis for integrating the non-Opec countries' contribution to the efforts of Opec countries."

At the technical meeting, consensus emerged around the duration of the output curb, which is to begin in January 2017 and last for six months. Delegates discussed cutting members' output by 4-4.5pc from October levels, using Opec secondary source figures, excluding Nigeria and Libya. But the issue of how to integrate Iran and Iraq into the deal was not resolved.

Iran has shown no public indication that it is willing to back away from its insistence that it be exempted from production restraint until it reaches output levels matching those prior to the 2012 US and EU sanctions that were removed in January this year. A January 2017 start date for a deal's implementation might give it time to hit that level.

Iraq had said it should be exempt because of its current war footing. It has also taken exception to secondary source calculations of its production. But since the technical meeting took place prime minister Haider al-Abadi has said Baghdad would be willing to cut production, although he gave no details over the extent or baseline of the cut he was offering.

Ahead of the ministers' meeting, Opec will meet with some non-Opec producing countries to try to involve them in a production restraint agreement. Russia has long said it would freeze output if Opec did the same. It is currently producing at record highs. But the active participation of other non-Opec countries in a deal is likely to be token at best. A similar meeting a few weeks ago produced nothing although that followed the failure of Opec's technical committee to reach its own proposal that would form a basis for a deal with non-Opec producers.

The willingness of non-Opec producers to bolster even the political credibility of the Opec and non-Opec meeting remains weak. Overnight Canada said it had been invited but was most unlikely to attend.