OPEC on tightrope as output target talks prompt clash

OPEC strikes deal to boost oil production | TheHill

Opec and a group of non-Opec countries agreed on Saturday that they would return to 100 per cent compliance with previously agreed oil output cuts, after months of underproduction by Opec countries including Venezuela and Angola. In the immediate aftermath, Brent jumped $2.29 a barrel, or 3.1 percent, to a high of $75.34 before slipping to around $74.60 by 1345 GMT Friday.

But the joint communique did not spell out how the additional barrels would be divvied up, a key issue given Iran's insistence that cartel members should not be allowed to offset involuntary production losses in other member countries. Russian Federation has been voicing the decision for an output increase months before the Friday meeting.

OPEC met in Vienna amid calls from the US, China and India to cut the price of crude oil and prevent a shortage that may harm the global economy.

OPEC's decision to maintain 100 per cent conformity, as compared to 152 per cent observed in May, comes as a relief for India which had been raising concerns at domestic and global forum over increased market volatility and high crude prices. This not only adversely impacts one of OPEC's largest member's upstream activities, further weighing output levels lower by 600,000 bpd, but also lead to the retraction of production volumes half amounting to nearly half of OPEC's agreed total reduction of 1.2 mbpd.

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 UAE minister said. According to Kazempour, Venezuela had said its output would partially recover in the next three to four months, another reason why other producers should not step in to compensate.

In late May, the country's largest oil company, Rosneft, announced a capacity test for bringing back the production it cut under the deal between Moscow and OPEC.

Iran's Zanganeh earlier this week accused Trump of trying to politicise OPEC and said it was USA sanctions on Iran and Venezuela that had helped push up prices. In reality, the accord will add a smaller amount of oil to the market because a number of countries are unable to raise their output.

Colbert Dissects The ‘Not So Hidden’ Message Melania Trump’s Jacket Conveyed
It has already sold out, with sales being pledged to a refugee and immigrant support service based in Texas . She stated that she "hates to see children separated from their families". "This was 100 percent her idea".

Trade worries still loomed, however, as U.S. President Donald Trump, in his latest move, threatened to impose a 20 percent tariff on all European Union vehicle imports.

"Need to keep prices down!" he tweeted.

How intent is the Organization of Petroleum Exporting Countries to stick to output curbs put in place 18 months ago?

Some analysts note that while Trump has blamed OPEC, his policies have also helped increase the cost of oil by, for example, limiting exports from Iran. The US legislative threat, as damaging as it might be more broadly if it ever became law, is nevertheless likely to hang over the next round of OPEC deliberations in September, especially if prices are again surging.

Additionally, Iranian officials said they didn't expect their energy customers would get waivers from the United States sanctions, meaning the global energy market may be disrupted. Crude oil price in India surged from $50.57 bbl in May a year ago to $75.31 bbl this May. Russia, a non-member, is the second largest oil producer after Saudi.

A rally in oil prices due to OPEC's earlier decision to restrict supply in an effort to drain global inventories has given the sector a gain of more than 11 percent for the quarter-to-date, best among the 11 major S&P groups.

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