(Ecofin Agency) - Talks of an output freeze between members of the Organization of Petroleum Exporting Countries (OPEC) and non-members have caused a jump in crude prices, as the move raises hope for an agreement between member countries to reduce oil output and bolster prices.

Members of the oil cartel are not expected to meet until November in Vienna, Austria, but informal talks will be held at Algiers’ International Energy Forum on September 26-28.

Many of the requirements for a production deal seems to be in place than at the start of the year but for any agreement to be reached, more evidence will be required from major OPEC and non-OPEC members.

Like Russia, Iran and Iraq, Saudi Arabia’s oil production is at or close to maximum capacity, an increase analysts understand to be an aggressive demonstration of the kingdom’s ability to boost output ahead of the informal meeting of oil producers in Algeria by September.

According to published statistics, Saudi Arabia’s oil production reached a record in July and might increase further in August.

In the past ten years, Saudi’s oil production has been unusual nearly 400,000 barrels per day higher in July than January.

The fluctuation in production from January to July has been inconstant, going from a reduction of 325,000 bpd to an increase of over 1 million bpd.

This signifies that Saudi Arabia is increasing its output as a caution to rivals that if an agreement to freeze production was not arrived at, it has the resources to continue boosting its output and deepen the pain for all oil exporters.

To John Kemp, a Reuters market analyst, At one time, the kingdom may have turned to volume warfare to inspire agreement on output and rebuke non-compliance. But this time, there is no proof that Saudi Arabia is increasing its production so as to deepen the pressure on its rivals to arrive at a production freezing agreement.

Iran on the other hand has been increasing its output since sanctions were lifted in January, so as to recover its lost market shares, thereby disregarding demands to join the freeze initiative.

Iran is on track to reach its pre-sanction production level soon, before it would join other producers to freeze output.

The country’s officials have already indicated that the country would support the initiative after its crude production reached the level it wanted.

Iran exported about 2.3 million barrels per day of crude before sanctions reduced it by half in 2012.

Last week, Reuter’s latest figures showed that Iran’s exports had exceeded the two million barrels per day (bpd).

The Director for International affairs of the National Iranian Oil Company (NIOC), Mohsen Qamsari, had said that Iran’s overall exports reached 2.74 million bpd in June, including 0.6 million bpd of condensate.

He added that the country was still exporting about 0.4 million bpd less than the average it released on the market before sanctions.

Meanwhile, Russia’s output lingers near an all-time increase of 10.85 million barrel per day.

“All the conditions are set for an agreement. Probably this is the time because most of the big countries like Russia, Iran, Iraq and Saudi Arabia are reaching their top production level. They have gained the entire market shares they could gain,” Chakib Khelil, Algerian Energy minister from 1999 to 2010 said.

He added that, as producers are nearly producing at top speed, the impact of any consensus to prevent additional increases would be psychological but would nonetheless have a benefit for the market.

Khelil noted that the global crude glut is already decreasing and the markets will most likely reach complete balance in 2017.

Qatar’s Minister of State for Defense, Khalid bin Mohammad Al Attiyah, has said that re-balancing in the market is proceeding gradually and global producers need to work together and fast-track the process.

“OPEC and other producers need to do something because for the market to rebalance on its own that will take a lot of time. Even next year, we have to be cautious and not expect that the market will rebalance quickly. The freeze deal will not have a huge impact on fundamentals but it will help improve the market sentiments. At the end, a step taken is better than doing nothing,” Al Attiyah said.

Anita Fatunji