Saudi Arabia reconsidering OPEC output cap: sources

Saudi Arabia is ready to consider a surprise deal with fellow OPEC members that would include bringing back an output cap that had been scrapped in December, Bloomberg reported, citing unnamed delegates familiar with the matter.

A deal on production policy, if adopted, would help mend divisions that have grown within OPEC in recent years.

The news comes ahead of the producer group’s meeting in Vienna today. No formal proposal has been made yet and Iran’s minister has repeatedly said the idea of a production ceiling for Tehran is not possible.

Speaking in Vienna, Iranian oil minister Bijan Zanganeh, instead said he prefers individual quotas for members rather than an overall production ceiling.

Any agreement will hinge on Iran, which has refrained from joining talks and agreements on production as it ramps up output to reclaim its market share.

Although analysts have set low expectations for the OPEC meeting, some have suggested that a deal to cap production would still be relevant.

Gary Ross, chairman of PIRA Energy, a New York-based oil consultant said that such an agreement would show that "OPEC is still important to the oil market.” It would also signal that "despite political differences, they can work together to achieve similar economic interests -- this is certainly a more positive outcome than the market expected," he added.

Any consensus reached on the matter would come as a shock as only one out of 27 analysts polled by Bloomberg last month expected an output target to be decided upon during the talks.

The cartel’s meeting comes amid stabilizing oil prices, which have settled just under $50 in recent weeks. Brent crude last traded up 0.1 percent at $49.77/bbl, while WTI crude was still lower by 0.2 percent at $48.92/bbl.