Oil falls as Opec nears deal to raise production

A man walks past an electronic stock quotation board outside a brokerage in Tokyo

A man walks past an electronic stock quotation board outside a brokerage in Tokyo

"We're in comprehensive talks with all ministers, especially Saudi Arabia and Iran", Iraq's Oil Minister Jabbar al-Luaibi told reporters on Thursday.

"Globally, crude prices have gone beyond the threshold, which can be sustained by the world, particularly countries like India, which is a key driver of world economy", Mr. Pradhan said at an OPEC conference in Vienna.

Some OPEC members have been opposed to a production increase, and others don't want to go as far as Saudi Arabia.

"In the long term, this will have a negative effect on the global economy even if, in the short term, it might be positive for other non-U.S. producers", Rainer Seele, chief executive at Austria's oil company OMV, said in Vienna where OPEC officials and ministers and top oil industry executives attended a seminar this week. Iranian Oil Minister Bijan Zanganeh said Tuesday that Trump was responsible for the surge in oil prices after applying sanctions against Iran and Venezuela.

The Saudi proposal involves a complex calculation based on how much the group has cut production beyond the initial target of 1.8 million barrels a day set in 2016, the delegates said, asking not be named discussing private meetings.

Falih said the world could face a supply deficit of up to 1.8 million bpd in the second half of 2018 and that OPEC's responsibility was to address consumers' worries. After sitting down with several counterparts and speaking to Russian Energy Minister Alexander Novak by phone on Wednesday, the minister softened his tone considerably, saying he was optimistic about the outcome of the meeting. "How much oil do we need?. around 1 million (barrels per day, bpd) probably".




The kingdom and its allies estimate that total cuts now amount to 2.8 million barrels a day.

Phil Flynn, an oil analyst with The Price Futures Group, expects a deal for around an extra 1 million barrels a day.

Signalling that positions might be softening, Saudi's Falih acknowledged that "not every country can respond to an allocation of higher production" and said it was important to be "sensitive" to those concerns. "We are trying to narrow the gap between the two and we hope that this afternoon reach some sort of good compromise".

Russia, which is not in OPEC, has proposed producers raise output by 1.5 million bpd.

A potential tariff would also limit the revenues of US oil exporters and force them to accept even steeper discounts to find new buyers of their oil to replace the sales in their second-largest single oil export market after Canada, analysts warn. "One thing you can be assured of is: we will be responsive, we will release supplies to make sure there's no shortage".

-With assistance from Salma El Wardany, Annmarie Hordern, Manus Cranny, Elena Mazneva, Laura Hurst, Javier Blas, Grant Smith, Francois de Beaupuy and Golnar Motevalli. Off-topic, inappropriate or insulting comments will be removed.

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