Oil slumps as Iran-Saudi discord dims freeze prospects

Iran on Tuesday ruled out an imminent agreement with other major oil producers to freeze output as regional rivalry with Saudi Arabia hindered efforts to reverse a price slump.

The new signs of discord sent oil prices sliding again on world markets in the face of a global supply glut that has left a gaping hole in the finances of oil-exporting nations.

US benchmark West Texas Intermediate for delivery in November fell 3.5 per cent to $44.31 a barrel in New York trade on Tuesday.

Brent North Sea crude for November shed 3.4 per cent to $45.75 a barrel.

Opec kingpin Saudi Arabia has so far refused to curb its output at a time when Iran is ramping up production following the lifting of nuclear-related sanctions.

Iranian Oil Minister Bijan Zanganeh said today on the eve of an informal Opec meeting in Algeria that the Islamic republic was not yet ready to join a mooted production freeze.

"It's not in our agenda to reach an agreement in two days. We need time for more consultation," he told reporters on the sidelines of an energy conference in Algiers.

Zanganeh said Iran wanted to increase its daily output to pre-sanctions levels of four million barrels, from the current estimated level of up to 3.8 million.

Saudi Arabia and Iran, the Middle East's foremost Shiite and Sunni Muslim powers, are at odds over an array of issues including the wars in Syria and Yemen.

But there were some tentative signs of a narrowing of differences in Algiers, where major non-Opec producer Russia will also join the talks on Wednesday.

Zanganeh signalled that an agreement to stabilise oil prices could be struck at a November 30 meeting in Vienna of the Organisation of Petroleum Exporting Countries.

And Saudi Oil Minister Khaled al-Faleh said he was optimistic that ministers would find some common ground.

"I remain optimistic on the basis of market fundamentals that are moving in the right direction and also on the producers coming to a common view," he said.

OPEC secretary-general Mohammed Barkindo, of Nigeria, suggested that the remarks from Iran and other producers were "all part of the consultations".

Oil prices have more than halved since mid-2014 as a US shale oil boom prompted a fierce fight with OPEC for market share.

A previous bid to freeze output fell apart in Doha in April as Iran refused to take part, saying it needed to return output to pre-sanctions levels. (AFP)