Saudi Arabia persuades Iran and OPEC to agree increase in oil production

Saudi Arabia persuades Iran and OPEC to agree increase in oil production

Saudi Arabia persuades Iran and OPEC to agree increase in oil production

U.S. President Donald Trump has been calling publicly for the cartel to help lower prices.

Jack Allardyce, oil and gas research analyst at Cantor Fitzgerald Europe, said he had the "expectation that supply quotas will be increased, but probably more in line with the smaller range being quoted (300,000-600,000 barrels a day) given the lack of consensus amongst Opec members".

Traditional Saudi allies - the United Arab Emirates, Kuwait, Oman and Bahrain - believe Saudi Arabia was too quick to respond to USA calls for higher production, and have been rattled by Riyadh's close coordination with non-Opec Russia, sources said. Venezuela's production has dropped amid domestic political instability.

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading higher shortly before the regular session opening on Friday.

Al-Mazrouei noted that the decision "is challenging for those countries that are struggling with keeping their level of production".

Opec is divided over the future for oil production.

"And now he expects OPEC to change something for better prices".

"Longer term, this is a bit of a win for consumers", said Jamie Webster, director of Boston Consulting Group's Center for Energy Impact.

At stake is the fate of an 18-month-old supply-cut deal between members of the Organization of the Petroleum Exporting Countries and allied countries that has cleared a global oil glut and lifted crude prices.




On Tuesday, Iranian Oil Minister Bijan Zanganeh told reporters that he would leave Vienna on Friday before OPEC holds talks with non-OPEC producers the next day. In practice, its combined output was even less due to production problems.

Brent oil prices were down 2 percent LCOc1 on Thursday.

Russian Federation and Saudi Arabia are expected to increase their production to compensate for the potential decline in oil production after United States sanctions on Iran and Venezuela. That surge prompted the US president to complain on Twitter that the cartel was artificially inflating prices. "Need to keep prices down!" he said in a tweet.

The Trump administration also reportedly asked top OPEC producer Saudi Arabia to offset potential disruptions to Iranian oil exports by pumping more.

Al-Falih also said leaders from other countries including India, China and South Korea had also expressed concerns to him that their economies were "starting to feel the pinch of higher oil prices". In the past year, many promised to prioritize spending discipline over production expansion after previously rushing to pump more oil when prices recovered.

There are other considerations than dollars and rubles.

OPEC could distribute the increase unevenly to allow those that can produce more - Saudi Arabia, Kuwait and the United Arab Emirates - to fill in for those that cannot, although this could face resistance from countries reluctant to give up market share such as Iran.

The actual output increases set a bullish tone, as they came in below some of the highest figures that had been discussed prior to the meeting.

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