The official was quoted as saying Iran could not consider a cut until its exports increase by 1.5 million barrels a day, over its approximately 1.1 million barrels a day.
For the past several days, news services have been reporting that OPEC and producers from outside the cartel may meet to discuss production cuts. Brent crude futures were up more 6 percent this week on speculation there would be a meeting.
Adding fuel to the reports were comments from Russian Energy Minister Alexander Novak saying his country would cooperate with a deal to cut production. Novak also said Thursday that Saudi Arabia had proposed each country reduce oil output by 5 percent to support prices.
Dow Jones, however, quoted a senior Gulf OPEC official as saying that the Saudis did not ask Russia to cut output by 5 percent. The official also said the proposal was an old suggestion from Algeria and Venezuela.
On Friday, Russian Deputy Prime Minister Arkady Dvorkovich said the state would not intervene to balance the market, but at the same time Russia's Foreign Ministry announced that veteran minister Sergei Lavrov would visit the UAE and Oman to discuss oil prices.
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"I think the very fact that you've gotten this response and that this is in the air now, just shows you the economic situation for these countries is becoming more desperate. When they really have their back against the wall is when a deal gets made," said Yergin.
Saudi Arabia has repeatedly said it would consider cutting production if OPEC and non-OPEC producers also cut back.
"There's nothing new. It's another part of a stream of news that comes out of Russia and there's no indication that the Saudis have any desire to do anything," said Edward Morse, global head of commodities research at Citigroup.
Oil rallied hard when the initial reports crossed news wires, but it came off its highs as more headlines cast doubt on the news. West Texas Intermediate crude futures settled at $33.62 per barrel, up 1.2 percent on the day and about 4.5 percent for the week. Oil gave back some gains Friday when the Iranian headlines were reported.
The speculation about an emergency OPEC meeting has been circulating off and on, but clearly picked up more steam this week, triggering short covering in the futures market.
"I really don't think that has any legs. I don't expect we will see any talks coming from these, and the other reason I think the Saudis would not really pursue this is because the real target of the Saudis is the U.S. shale producers," said Chris Weafer, senior partner at Macro-Advisory in Moscow. "Unless they are also part of an agreement, I can't see Russia or Saudi cutting their own production to help the shale industry."
Weafer described Novak's remark as being "an impromptu comment, probably with the specific objective of trying to put some support in the oil price."
Read MoreWhy Iran is a problem for oil prices
Sanctions against Iran for its nuclear program were lifted this month, and the country has said it could quickly return 500,000 barrels a day to the market. Plus it also has more than 40 million barrels of crude and condensates in floating storage.
Yergin noted that Saudi Arabia has said it would cut if other producers also made reductions, but Iran is set on moving forward. He also said it would be difficult for Iraq to cut back since 95 percent of its revenue is from oil, and it just reported an increase to 4 million barrels a day.
"The Saudis have all along, have consistently said they would not cut by themselves but if the other big players will cut they will cut too. They're not going to absorb the blows for others," Yergin said.
The comment from Russia's Novak follows reports that the Energy Ministry met with Russian oil companies and a meeting with OPEC was discussed.
"These are routine meetings. The meetings undoubtedly took place. We should not interpret these meetings as any sort of roundtable call to action," said Weafer. "They have these meetings regularly and discuss what they can do about the oil price. ... It would be wrong to suggest that Russia is now spurred into some type of emergency action."
Russia and Saudi Arabia are the first and second largest oil producers, with Russia slightly ahead at 10.6 million barrels. The U.S. is third with the latest weekly report putting production at 9.2 million barrels a day.
OPEC did not have much to say about the speculation on the idea of a meeting between its members and non-OPEC countries. "We cannot confirm the rumor," said a spokesperson for the Organization of the Petroleum Exporting Countries.
One version of the story circulating was that the Russians suggested Saudi Arabia should reduce production and then Russia would cut later on.
"It's a Russian inspired farce," said John Kilduff, partner at Again Capital.
Oil production in the U.S. is one reason why the supply glut can continue.
The U.S. has now stockpiled 1.2 billion barrels of crude, and the growing supply in Cushing, Oklahoma, and elsewhere has analysts concerned that oil will start becoming difficult to store, meaning its price on the cash market could get even cheaper.
While the industry has been reporting rig shutdowns, the volume of oil pumped per day in the past week was steady at 9.2 million, but below the high of 9.6 million barrels per day in April.
Baker Hughes reported the oil rig count dropped to 498 for this week, the lowest number since March 2010, and about 700 fewer than the same period last year.
Monthly government production data for the U.S. for November showed production slipped very slightly from October levels, to 9.32 million barrels a day.
Platts' forecasting unit Bentek said Wednesday it expects that overall production from the major formations in North Dakota and Texas dropped slightly in December versus November.
The U.S. oil industry ranks in the top three but it is made up of dozens of independent producing companies.