OPEC braces for tough Vienna talks on hiking oil output

Oil rises ahead of OPEC, pressured by China tariffs

The news of the United States asking OPEC to increase oil output by 1mb/d (million barrel per day) in the second half of 2018 and rising U.S. oil production has put downward pressure on prices.

But it's Iran and Venezuela-founding OPEC members and those most affected by US sanctions and unable to boost production-that are most vehemently opposing an increase in the cartel's production.

Resistance is being led by Iran, deeply wary of any move by regional rival Saudi Arabia that could push down oil prices at a time when Tehran faces renewed sanctions following US President Donald Trump's decision to quit its global nuclear deal, which is likely to send the country's oil exports plummeting.

"If the Kingdom of Saudi Arabia and Russian Federation want to increase production, this requires unanimity". Trump complained at least twice, on 20 April, and then again on 13 June, about oil prices.

There is no incentive for those countries to agree to an increase in OPEC's production because they have no capacity to respond to one. Indeed, the single largest factor that could push prices down going forward would be a sizable increase in OPEC plus supply.

"It is due to various circumstances in global (oil) market and mainly the value of Indian Rupee has reduced in comparison to US Dollar, which has led to a surge in oil prices". These numbers suggest that USA and handful of other non-OPEC countries will more than meet global demand. Saudi Arabia's own data for May showed it increased its own output by 161,400 barrels a day.

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On the rising oil prices in the country, the minister assured that the government would leave no stone unturned to keep these products within the reach of the common man.

While a compromise may be necessary to overcome vocal opposition from Tehran, Baghdad and Caracas, it could mean the resulting supply boost is smaller than oil traders - or indeed the U.S. President Donald Trump - had been anticipating. "That would obviously infuriate Trump", he said.

For one, the confrontationist attitude shown by the United States government has rattled world currency markets.

Iran, Iraq, and Venezuela are opposed but according to reports there are signs of an agreement. The IEA predicted that Venezuela's oil output could fall to just 8,00,000 b/d or even lower next year, from 1.36 million b/d in May and following a 1 million b/d fall over the last two years.

"In this meeting and the 7th OPEC International Seminar, a unique assembly of Ministers, heads of intergovernmental organisations, chief executives of national and international oil companies, industry leaders, academics, energy experts and media, we will review the noteworthy progress that we are making", he said. Brent crude jumped $1.55 to $74.99 a barrel.

This suggests that there has been a rebalancing after years of an overwhelming oversupply of the commodity; equally, it could also point to underlying concerns that have been evident for some time, that some members no longer wish to comply with OPEC's production cut deal. After yearlong rise in oil and gasoline price, there's a call to control Oil price from rising too far and too fast.

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