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Oil searches for traction amid production row

Iran calls last week's proposal to freeze crude oil a production "a joke."
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |   Feb. 23, 2016 at 9:59 AM
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NEW YORK, Feb. 23 (UPI) -- A rally in crude oil prices stalled out in early Tuesday trading as markets waited in anticipation of Saudi Arabia's gauge of the impact of a production freeze.

Russia joined some members of the Organization of Petroleum Exporting Countries last week in embracing a move to freeze production at January levels in an effort to pull markets away from the supply side. Backers said the proposal depended in part on broad-based cooperation.

Defending its share on the oil markets, Iranian officials said Tuesday the country has to act in a way that attracts more foreign partners to its energy sector.

Crude oil prices were relatively stable in early Tuesday trading after mixed sentiments on market trajectory. The International Energy Agency said this week some of the supply strains will ease short-term as U.S. production fades, though the International Monetary Fund said oil would continue to move through a weaker market.

Brent crude oil opened in New York at $34.77 per barrel, up about 0.2 percent from the previous session. West Texas Intermediate, the U.S. benchmark price for crude oil, was down about 0.5 percent to start the day at $33.21 per barrel.

Speaking from an energy conference in Houston, Saudi Oil Minister Ali al-Naimi was quoted by Houston Public Media as saying finding a coordinated solution to lower oil price may require producers to "really work hard."

Neil Atkinson, director of the oil markets division at the IEA, said in an interview last week the volume of oil expected on the market during the first half of the year appears to be unchanged, even with the proposal to freeze output.

Badri gave his formal address in Houston about shortly after markets opened in New York. Ahead of the speech, Iranian Oil Minister Bijan Zangeneh said any calls on Iran to scale back production at a time when sanctions pressures are easing are "a joke."

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