20000309

Iran seen agreeing to output hike-OPEC sources

LONDON: Price hawk Iran is seen as going along with an oil output hike starting from April 1 to cool high prices, OPEC sources said on Wednesday.

The sources told Reuters that a statement released after talks in Riyadh between OPEC powers Saudi Arabia and Iran signalled that Tehran now had no objections to releasing extra oil supplies.

"Now there is a consensus on raising production from April 1," one of the sources said. "Iran does not object to a production increase. It will go along with other producers."

Saudi Oil Minister Ali al-Naimi and Iranian counterpart Bijan Zanganeh said in a statement after meeting in Riyadh earlier on Wednesday that they agreed on a need to "balance the market in order to reach sustainable price levels conducive to world economic growth and market stability".

At that time it was unclear from the joint statement if heavyweight Saudi Arabia had succeeded in persuading its former OPEC foe Iran to agree to raise output to calm the market.

But the source said: "There will certainly be an increase even though a couple of states say they object. Now it is very clear that there is a consensus between OPEC and non-OPEC."

The source did not identify the two states he described as objecting to an output rise.

Asked how much oil would be released, the source added: "A reasonable amount to satisfy the market's needs at that time (April 1)."

On March 27 the Organisation of the Petroleum Exporting Countries is set to decide output policy from April 1 following the end-March expiry of production cuts that have severely drained oil inventories and sent prices to nine-year highs.-Reuters