ALSO READIran wants much steeper Saudi oil cut - OPEC source OPEC set for no deal as Iran rejects Saudi oil output offer Saudis offer oil cut for OPEC deal if Iran freezes output - sources Saudis, Iran dash hopes for OPEC oil deal in Algeria OPEC set for no deal on oil output as Saudis, Iran at loggerheads
By Ahmad Ghaddar, Alex Lawler and Rania El Gamal
VIENNA (Reuters) - Saudi Energy Minister Khalid al-Falih said on Wednesday OPEC was close to clinching a deal to limit oil output, adding Riyadh would agree to Iran freezing production at pre-sanctions levels.
The comments could be seen as a compromise by Riyadh, which in recent weeks insisted that Iran fully participate in any cut.
Brent crude futures jumped more than 5 percent to above $49 a barrel. The Organization of the Petroleum Exporting Countries started a closed-door session at around 1000 GMT with a news conference scheduled for 1500 GMT.
Falih also said OPEC was focusing on reducing output to a ceiling of 32.5 million barrels per day, or cutting by more than 1 million bpd, and hoped Russia and other non-OPEC members would contribute a cut of another 0.6 million bpd.
But he added that even if OPEC failed to reach a deal, the market would slowly recover as fundamentals were moving in the right direction.
The 14-country group, which accounts for a third of global oil production, made a preliminary agreement in Algiers in September to cap output at around 32.5-33 million bpd versus the current 33.64 million bpd to prop up oil prices, which have halved since mid-2014.
OPEC said it would exempt Iran, Libya and Nigeria from cuts as their output has been crimped by unrest and sanctions.
The deal was seen as a victory for Iran. Tehran has long argued it wants to raise production to regain market share lost under Western sanctions, when its political foe Saudi Arabia increased output.
In recent weeks, Riyadh changed its stance and offered to cut its output by 0.5 million bpd, according to OPEC sources, while suggesting Iran limit production at around 3.8 million bpd - in line with or slightly above the country's current output.
An Algerian energy source said OPEC ministers so far supported the proposal.
Iraq has also been pressing for higher output limits, saying it needs more money to fight the militant group Islamic State. Iran and Iraq together produce over 8 million bpd, only slightly behind long-time leader Saudi with 10.5 million bpd.
The argument between Iraq and Saudi Arabia mainly focuses on whether Baghdad should use its own output estimates to limit production or rely on lower figures from OPEC's experts.
(Additional reporting by Vladimir Soldatkin, Shadia Nasralla and Lisa Barrington; Writing by Dmitry Zhdannikov; Editing by Dale Hudson)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)