From Tsvetana Paraskova: In the latest turn of events regarding OPEC’s plan to cut production, Iraq said on Sunday that it should be exempted from output cuts because of the war it has been waging against Islamic State.
“We are fighting a vicious war against IS,” Reuters quoted the Iraqi Oil Minister Jabar Ali al-Luaibi as saying to reporters.
Iraq is requesting to join the ranks of Iran, Libya and Nigeria, who everyone expects will be exempt from production cuts when OPEC members meet in Vienna on November 30 to discuss the specifics of a possible output cap deal.
Since the cartel reached an initial agreement to work toward a deal to limit production to between 32.5 million bpd and 33 million bpd, Iraq has surprised the market several times with comments by officials.
Iraq was the first OPEC member to question how the organization calculates secondary-sources output figures, literally the day after the deal-to-make-a-deal was reached. Venezuela and Iran have since joined the group of those who claim that OPEC secondary sources undermine their production levels.
According to Bloomberg, Al-Luaibi said on Sunday that Iraq was now pumping more than the 4.7 million bpd it produced last month, and could further raise output.
The head of Iraq’s state oil marketing company, SOMO, Falah al-Amiri, also commented on Iraq’s oil production on Sunday, saying, as quoted by Reuters: “We should be producing 9 million if it wasn’t for the wars.”
Some countries have taken part of Iraq’s market share, therefore it would not cut production, he added.
Apart from weighing on the crude oil prices, the latest comments and signals coming from Baghdad are further pointing to even tougher negotiations that OPEC is facing in the month leading up to November 30.
At the time of writing, WTI Crude was trading down 2.03 percent at US$49.82, while Brent Crude was down 2.11 percent to US$50.69.
Today’s big oil price pullback is pushing leveraged oil plays much lower. The double leveraged ProShares Ultra DJ-UBS Crude Oil (NYSE:UCO) rose fell $0.35 (-3.06%) to $11.08 per share in Monday afternoon trading.
Meanwhile, the triple leveraged VelocityShares 3X Long Crude ETN linked to the S&P GSCI Crude Oil Index Excess Return (NYSE:UWTI) plunged $1.64 (-5.92%) to $26.06 per share on Monday afternoon.
This article is brought to you courtesy of OilPrice.com.