What to Expect From the OPEC Meeting

What to Expect From the OPEC Meeting

What to Expect From the OPEC Meeting

Oil prices rose more than 2% Friday after OPEC reportedly reached a deal to ease supply cuts that have been propping up prices for almost two years.

The Organization of the Petroleum Exporting Countries, or Opec, is gathering in Vienna amid calls from the United States, China and India to cool down the price of crude and prevent an oil deficit that would hurt the global economy.

"Iran rejected a potential compromise, saying it won't support even a small increase in oil production".

"Our OPEC secretariat will share with us today in the Joint Ministerial Monitoring Committee their report". The talks, held as the cartel hosted an worldwide energy conference attended by hundreds of officials, executives and investors, will shape oil prices, energy stocks and currencies of petroleum-exporting countries for months to come.

Oil prices rose more than 1 percent on Friday as OPEC tried to agree a deal to increase output to compensate for losses in production at a time of rising global demand.

Saudi Arabia and its allies estimate that total cuts now amount to 2.8 million barrels.

Oil prices have spiked by as much as 20% this year, in part because OPEC has produced even less than was foreseen under the 2016 agreement, which was supposed to reduce supply by 1.8 million barrels per day.

Sources said Saudi Arabia did not want to be seen as putting too much pressure on Iran and hence Russian Federation could instead try to convince Tehran.

Reuters, quoting unnamed OPEC sources, said Iran had demanded that usa sanctions be mentioned in the group's post-meeting communiqué.

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Saudi Arabia, under pressure from U.S. President Donald Trump, wants to unwind some of the cuts by engineering a "moderate" supply boost in the second half of the year. Outages in some nations and deeper-than-agreed cuts by others have made the actual reduction larger by about 1 million barrels a day.

There's a good reason for the two countries' opposition - neither have the ability to increase their own production. Among Opec countries, Venezuela is all but certain to be unable to boost output with its industry suffering because of an economic crisis.

Opec and its allies have since a year ago been participating in a pact to cut output by 1.8 million bpd.

If a 25 percent duty on US crude imports is implemented by Beijing, American oil would become uncompetitive in China, forcing it to seek buyers elsewhere.

WTI crude oil prices ticked higher by 1.4 percent to $65.84/bbl on Wednesday following a drop in USA commercial crude inventories this week, but all eyes will be on Vienna by the end of the week.

Trump's involvement makes it hard for Tehran to accept a compromise. "A more relaxed policy will push Brent towards $70 a barrel, while restrictive measures will support crude oil back towards $80".

Zanganeh has said that if OPEC returned to regular compliance, the group would raise output by around 460,000 bpd. Attempts to reach a compromise have included proposals to boost output by 300,000-600,000 bpd. He said Opec could meet again in September to adjust the deal. "They pay attention to consumer nations".

With assistance from Annmarie Hordern, Manus Cranny, Nayla Razzouk, Salma El Wardany, Laura Hurst, Julian Lee, Elena Mazneva, Francois de Beaupuy and Golnar Motevalli.

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