Oil prices extend gains; Iran eyes output freeze

SINGAPORE ( AFP) – Oil prices extended gains in Asia Thursday as traders welcomed comments from Iran’s oil minister praising a conditional agreement between Saudi Arabia and Russia to freeze output levels, fuelling hopes for stability in the commodity market.

Bijan Zanganeh said Tehran will “support any measure that can stabilize the market and increase prices’’ but stopped short of committing Iran to any curbs.

His remarks came after he met his Iraqi, Venezuelan, and Qatari counterparts in Tehran on Wednesday where they held their own talks on the global supply crisis.

On Tuesday Saudi Arabia and Russia, the two biggest producers in the world, agreed to limit their pumping but only if others followed suit.

While much-needed output cuts have not been announced, traders consider the latest developments a step in the right direction and providing a welcome respite after crude flirted with 13-year lows last week.

At around 0700 GMT, US benchmark West Texas Intermediate for delivery in March was up 50 cents, or 1.63 percent, at $31.16 and Brent crude for April climbed 25 cents, or 0.72 percent, to $34.75 a barrel.

On Wednesday WTI jumped more than seven percent while Brent added 5.6 percent.

“Prices soared sharply after the announcement (of the conditional freeze) but gains were pared as the market was concerned that the provisional agreement would not gain wide acceptance, especially from Iran, which is set to ramp up production to pre-sanction level,’’ said Sanjeev Gupta, who heads the Asia oil and gas practice at EY.