IEA dismisses Russia-Opec oil deal as largely 'meaningless'

Oil prices dropped on Wednesday after the International Energy Agency admitted the effect of a deal among some Opec producers and Russia to freeze production could be "meaningless".

"Amongst the group of countries (participating in the meeting) that we're aware of, only Saudi Arabia has any ability to increase its production," IEA oil industry and markets chief Neil Atkinson said at an industry event, according to Reuters.

Oil prices have firmed up in recent weeks after talks between Russia and some of Opec's main players, including Saudi Arabia.

But Atkinson said a freeze on production was "perhaps rather meaningless" and was merely "some kind of gesture" aimed at building confidence in the stability of oil prices.

Earlier this month, Russia said it accepted that Iran would want to increase production and revive its market share.

Tehran confirmed it intends to freeze oil production only when it reaches 4m barrels a day, meaning it it intends to increase, not hold production from the current level of around 2.8m barrels per day.

Front-month West Texas Intermediate was down more than 2% to $40.60 at 1345 GMT on Wednesday, with Brent crude down 1.56% to $41.14.