Iran rebuffs Trump's call for OPEC to increase oil output | AP business

Iran rebuffs Trump's call for OPEC to increase oil output | AP business

Speaking after Thursday's meeting, Falih said Saudi Arabia and Russian Federation would recommend raising output by one million barrels a day in Friday's OPEC gathering and Saturday's meeting of non-OPEC allies.

Major oil producers are set to pump around 1m more barrels a day to help cool crude prices as part of an Opec deal, according to Saudi Arabia's energy minister. Assuming that the main production continues, that will continue to drive inventories down, we think that that would be, you know, probably too short of a supply situation, that we can not allow to happen.

The new deal would effectively roll back the deeper-than-intended cuts from nations such as Venezuela, returning the curbs to the level originally agreed in 2016, the delegate said.

The problem for traders and ministers trying to estimate the price needed to rebalance the market is that consumption responds to price changes with a delay of six to 18 months.

Front-month USA crude futures extended their rally, trading as much as $1.39 a barrel above the second month contract.

Once known for rampant cheating on agreed oil output targets, the Organization of the Petroleum Exporting Countries has been over-delivering on a pact in place since January 2017, cutting around one and a half times the promised amount.

Iran's oil minister, Bijan Namdar Zanganeh, questioned this week whether OPEC is united enough to reach any agreement, and said Trump had politicized the debate over oil prices.

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Zanganeh was speaking ahead of a highly-anticipated meeting in Vienna, Austria, on Friday where OPEC members could move to ease the production cuts. US President Donald Trump has been calling publicly for the cartel to help lower prices.

Iran is particularly vocal about its objections as it braces for the impact of fresh United States sanctions on its oil exports after President Donald Trump quit the global nuclear agreement. The credibility of the revitalized organization and the legitimacy of its alliance with non-OPEC producers, and its promises to bring price stability to the market, are on the line. US light crude was up $3.11, or 4.7 percent at $68.65, supported by the OPEC announcement and by an expected drawdown at the USA oil supply hub at Cushing, Oklahoma. "We are in for higher prices for longer", he said.

Markets are also watching tension between the United States and China, with both sides threatening to impose duties on each other's exports, including US crude oil. OPEC sources have said that if a 1 million bpd output hike were approved, Saudi Arabia would add about 0.25-0.3 million bpd to supply.

So far there is no indication that Iran and the other members would agree to such a reallocation, although with officials holding extensive talks in the run-up to Friday's Opec meeting, further compromise could be made.

So an OPEC deal to increase output could also influence the balance of power in the Middle East.

The US, China and India had urged Opec to release more supply to prevent an oil deficit that would hurt the global economy.

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