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Sun 22 Feb 2009 05:31 PM

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Iran official sees possible oil price rise

Head of Iran's state oil firm sees crude prices rising on higher consumption in coming months - news agency.

The head of Iran's state oil firm expressed hope that crude prices would rise, citing predictions of increased consumption in coming months, the official IRNA news agency reported on Sunday.

Seifollah Jashnsaz, managing director of the National Iranian Oil Company, also said Iran had cut output by 550,000 barrels per day (bpd), in line with the drive by the Organization of the Petroleum Exporting Countries (OPEC) in recent months to reduce production in a bid to halt tumbling prices.

Oil prices have plunged by more than $100 a barrel since a peak of $147 last July as the global economic downturn hit energy demand, despite a series of production cuts by OPEC.

US crude traded at around $39 on Friday.

But Jashnsaz said the OPEC reductions had helped the market.

"The decisions adopted in the previous two OPEC meetings and the compliance of member states with their output cuts have brought a relative increase in the price of oil in the market," he was quoted as saying by IRNA.

Supplies are falling as OPEC implements output curbs totalling 4.2 million bpd since September. OPEC says its compliance rate is 80 percent. Iran is OPEC's second-largest exporter.

"It has been more than two months since the Islamic Republic lowered output by 550,000 barrels per day," Jashnsaz said.

Iran has previously said a further cut would be needed but the IRNA report did not mention this.

"Considering predictions of increased oil consumption in the months to come, there is hope for an increase in the price of oil," Jashnsaz said, without specifying which forecasts he was referring to. (Reuters)

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