Oil prices dip as Iran says no to output freeze

Iran's oil minister Bijan Zengeneh

TEHRAN - Oil prices slipped Monday after Iran said it had no plans to join any output freeze by other major producers.
Despite a recent rebound, world crude prices are still at less than half of their levels of June 2014 because of a supply glut, partly fed by Iran's return to world markets in January after the lifting of nuclear-linked Western sanctions.
"The government has no plans for the time being to freeze or interrupt its increase in oil output and exports based on plans that are being carried out," National Iranian Oil Co. managing director Rokneddin Javadi told Iran's Mehr news agency, according to Bloomberg News.
Tehran's stance appeared to reinforce market doubts that the Organization of the Petroleum Exporting Countries (OPEC) -- of which Iran is a member -- will take any firm action to curb oversupply at its next meeting in Vienna on June 2.
Last month, talks in Doha involving OPEC members and other major producers such as Russia had already failed to reach a deal to cap production.
At about 1200 GMT, US benchmark West Texas Intermediate for delivery in July was down 54 cents at $47.87 a barrel. Brent North Sea crude for July shed 46 cents to $48.26.
CMC Markets senior sales trader Alex Wijaya told AFP the news out of Iran dashed rising confidence among traders prompted by a tightening of the supply-demand equation, with US output steadily falling and Nigeria and Canada suffering temporary cutbacks.
Officials had on Sunday lifted the evacuation order for several oil production sites north of Fort McMurray, the city threatened by massive Canadian wildfires, although officials said thick smoke still prevented a resumption of most production.
The fires, which forced the evacuation of 100,000 residents of Fort McMurray and the oil facilities to the north, interrupted extraction and refining of an estimated 1.2 million barrels of oil per day.
However, Wijaya said traders' focus would now shift to longer-term supply issues.
"There is concern that supply could still exceed demand at this point of time," Wijaya said.
"The key going forward is the OPEC meeting. If there is a strong agreement from the meeting and concrete implementation, the market will react to this."