Oil fell around 3 percent on Monday after Iran dampened hopes of a coordinated stabilisation of production any time soon, saying it would join such discussions after its own output had reached 4 million barrels per day (bpd). Russia's energy minister says a future global oil deal on production ceiling might temporarily exempt Iran from freezing its output level.
Many world's largest oil producers have already decided to freeze production output, and a meeting is expected later in the month in Russia between both OPEC and non-OPEC producers to discuss production levels and how to best stabilize and boost oil prices.
OPEC delegates have said that further action, including a supply cut could follow by the end of the year, depending on Russia's commitment to the freeze and how much oil Iran adds to the market.
Around 15 OPEC and non-OPEC producers, accounting for about 73 percent of global oil output, support the output freeze initiative, the Qatari minister said in a statement.
Rouhani made the remarks, speaking to reporters on the sidelines of a cabinet meeting March 16 morning.
And analysts warned that a recent bull-run during which crude markets jumped more than 40% from multiyear lows earlier this year was overblown and largely driven by speculative traders buying crude from producers who were selling it as a financial hedge.
Saudi Arabia kept its crude oil production steady in February at just above 10 million barrels per day, suggesting the country is keeping to a preliminary deal with other producers to freeze output. But the deal had many conditions.
US West Texas Intermediate (WTI) crude futures were trading at $36.94 per barrel at 0117 GMT, up 60 cents from their last settlement.
But with United States crude stockpiles continuing to hit new records and Iran showing little interest in joining such a freeze, analysts expect no fundamental change to the glut in the near future. Prices may climb to $50 a barrel in the next three to four months as the market rebalances on higher seasonal demand and shrinking supplies, he said.
"When oil prices are falling below production costs, the income gains for consumers will be smaller than the costs to producers, and falling oil prices become a negative-sum game", it said.