OPEC strikes deal to boost oil production

OPEC strikes deal to boost oil production

OPEC strikes deal to boost oil production

He noted that many market participants agree with increasing oil production and within the framework of the forthcoming meeting of OPEC+ there will be many willing to comment on the recommendation of the monitoring committee to increase oil production by 1 mln barrels per day in the framework of the OPEC + agreement.

"The effective increase in output can easily be absorbed by the market", Harry Tchilinguirian, head of oil strategy at French bank BNP Paribas, told the Reuters Global Oil Forum.

Saudi Arabia's Oil Minister Khalid al-Falih talks to journalists at the beginning of an OPEC meeting in Vienna, Austria, June 22, 2018. Questions over the future of OPEC production, in light of OECD crude oil stockpiles falling below the Cartel's targeted five-year averages, now lingers over the market.

Because the group had been producing below that level, that means an increase in production of "a little bit less than 1 million barrels", the Emirati minister said.

European carmakers' shares fell sharply after U.S. President Donald Trump threatened to impose a 20-per-cent tariff on all European Union-assembled cars coming into the United States, if EU "tariffs and trade barriers" are not removed. West Texas Intermediate, the US benchmark for the price of oil, was up 3.4 percent to $67.75 per barrel.

Iran, OPEC's third-largest producer, had demanded OPEC reject calls from Trump for an increase in oil supply, arguing that he had contributed to a recent rise in prices by imposing sanctions on Iran and fellow member Venezuela. But in practice, major oil exporters will likely only be able to add about half that total to global markets, because many countries are already producing at capacity or face severe threats of supply disruption.

Even as late as the day before last week's crucial OPEC ministerial meeting in Vienna, none of the experts were speculating that Iran and Saudi Arabia would surprise the world by reaching an agreement that once again revealed the power of the original cartel.

"As a group we can meet the 100 percent compliance".

Up to April 2018, while oil prices increased by almost 25% compared to the same period previous year, investment in oil industry has not picked up in a commensurate manner. This, alongside forecasted global economic growth of 3.8 percent (Year-on-Year), should see markets, at worse, move sideways around the current 2014 highs or slightly lower.

Zanganeh has said that if OPEC returned to regular compliance, the group would raise output by around 460,000 bpd. United Arab Emirates Energy Minister Suhail Al Mazrouei gave similar assurances.

Support for the increase, which had been proposed by Saudi Arabia against objections from Iran, was unanimous, he said.

"Both Saudi and Iran can show that they won", an OPEC delegate said.

He also said OPEC could hold an extraordinary meeting before its next formal talks due on December 3 or adjust deliveries in September, when its monitoring committee meets, if global oil supply fell further because of sanctions on Iran.

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