Oil prices rise on hopes for Opec production deal

Crude oil futures rose briefly in early Asia trade today as the market hoped against hope of major producers making any progress on a deal to limit production and help reduce the glut that has kept prices under pressure for over two years.

An informal meeting of the 14 Opec members in Algiers of key Opec members with non-Opec producers Russia and Iran, following the International Energy Forum that starts today, however, is unlikely to arrive at a consensus on trimming production.

A meeting of members of the Oil Producing and Exporting Countries (Opec) in Algeria this week is unlikely to settle on any kind of deal that would help oil prices firm up and end the market slump.

Oil, however, held steady after the brief initial climb as the world's largest producers gathered in Algeria to discuss ways to support the market.

Oil prices had fallen by nearly 5 per cent last week, dented by signs Saudi Arabia and Iran were making little progress in achieving a preliminary agreement to freeze production.

Brent crude futures for October were down 2 cents at $45.87 a barrel by 0900 GMT, while US crude prices were up 7 cents at $44.55 a barrel.

Brent crude futures were slightly higher at $46.31 a barrel during early Asia trade on Monday after losing nearly 4 per cent in the previous session.

Ahead of the two-day event, Algeria's oil minister Nourredine Bouterfa has warned prices could drop back into the $30 per barrel range if officials walk away empty handed.

Although, that may not be the result, the meeting is unlikely to make any decisions regarding an output cut. In the absence of a deal, oil ministers are likely to say they are making progress, a move that effectively postpones any decision-making until Opec's official meeting on 30 November.

A top-level Russian delegation is at the forum, and it may join Opec for the meeting and there could still be a chance of an agreement on a production freeze between Russia and Saudi Arabia, and a cap on production by Iran. If that happens there could be a real impact on the oil price.

Markets, however, expects any potential deals to occur only at the official policy meeting in November.

Efforts to reach an agreement on output cuts have been complicated by the lifting of international sanctions against Iran, with the country planning to sell more oil abroad after years in the wilderness. Saudi Arabia has agreed to lower production only if Iran agrees to do the same.