Saudi’s Falih says OPEC close to reaching a deal

Saudi Energy Minister Khalid al-Falih said on Wednesday OPEC was close to clinching a deal to limit oil output, adding Riyadh would agree to Iran freezing production at pre-sanctions levels.

Brent crude futures jumped more than 5 percent to above $49 a barrel. The Organization of the Petroleum Exporting Countries started a closed-door session at around 1000 GMT with a news conference scheduled for 1500 GMT.

Falih also said OPEC was focusing on reducing output to a ceiling of 32.5 million barrels per day, or cutting by more than 1 million bpd, and hoped Russia and other non-OPEC members would contribute a cut of another 0.6 million bpd.

But he added that even if OPEC failed to reach a deal, the market would slowly recover as fundamentals were moving in the right direction.

“We believe that non-OPEC growth has reversed and also most of the OPEC growth we’ve seen is already behind us,” he told reporters.

“I’m optimistic,” said Iranian Oil Minister Bijan Zanganeh, adding there had been no request for Iran to cut output.

The 14-country group, which accounts for a third of global oil production, made a preliminary agreement in Algiers in
September to cap output at around 32.5-33 million bpd versus the current 33.64 million bpd to prop up oil prices, which have halved since mid-2014.

OPEC said it would exempt Iran, Libya and Nigeria from cuts as their output has been crimped by unrest and sanctions.