Oil markets under pressure as Iraq seeks exemption from OPEC output limits

Oil prices remained under pressure on Monday after Iraq said it wanted to be exempt from an OPEC deal to cut production. Iraqi oil minister Jabar Ali al-Luaibi said Baghdad wants to be exempt from any production cut the Organization of the Petroleum Exporting Countries is aiming to achieve. Iraq said it could raise output slightly this month from September's 4.774 million bpd.

Losses were capped after Iran said it would encourage other members to join an output freeze. Iran's deputy oil minister Amir Hossein Zamaninia said Tehran would encourage other OPEC members to join an output freeze, adding that $55-$60 a barrel is a fair price to bring stability to the market. All eyes now remain on the headlines from OPEC and non-OPEC producers on oil output cut issue.

Russia’s energy minister Novak was on wire earlier today ahead of the informal talks in Vienna later this week on 28th & 29th October. Novak backed the case for an output cut or freeze and said that cooperation between Russia and OPEC is intensifying.

Novak said that short-term output cut would reduce market volume and Russia is a responsible player in the oil market. He said that a production freeze or cut will allow market to rebalance.

Novak's comments followed OPEC Secretary-General Mohammed Barkindo's statement reiterating his pledge to stabilize oil markets as well as address overcapacity issues. Barkindo said that demand is at healthy levels but overhang remains a major concern. He noted that signs of rebalancing in fundamentals are under way and that the decision in Algiers helped to calm volatility in oil markets.

WTI crude was trading 0.88 percent lower on the day at around $50.51 levels at 10:30 GMT.