OPEC agrees to increase oil production

OPEC agrees to increase oil production

"We agreed on this issue and nothing more".

OPEC and its allies gave the final sign-off to an oil-production increase, sealing a victory for Saudi Arabia and Russian Federation.

Friday's OPEC agreement, reached after a last-minute compromise with Iran, was a fudge in the time-honored tradition of the group, committing to boost output without saying which countries would increase or by how much. However, Crude oil prices should still remain north of the $60 mark going into the year-ahead, especially considering global storage levels have only come down toward five-year averages based on some of the highest inventory levels recorded in decades of trades.

Investors fear a possible decline in global demand, at the time this sector continues to detoriorate in Venezuela.

"The real increase of production would be a figure exactly close to 1 million", Novak said in an interview with Bloomberg television.

How that translates into effective production increases is uncertain because some OPEC countries can not easily ramp up production.

Crude prices surged yesterday following the vaguely worded Opec agreement. This rare request from Washington came after U.S. retail gasoline prices surged to their highest point in three years and President Donald Trump publicly complained about Opec policy and rising oil prices.

"Hope OPEC will increase output substantially", Trump said on Twitter. "Need to keep prices down!" There are also growing signs that the renewed US sanctions on Iran could have a larger impact than the 1 million-barrel-a-day reduction in exports seen in 2012. In reality, ministers said several countries are unable to pump more so the real output boost would have been smaller - ranging from Iran's 500,000 barrel-a-day estimate up to Iraq's prediction for as much as 800,000.

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Riyadh has invited Moscow to join OPEC as an observer, the Saudi energy minister says. "We believe they are considering it", Falih told a news conference. "OPEC as a predominant supplier has the responsibility to maintain supply equilibrium", Pradhan said. The move eased concerns among the member countries about tightening supply and the potential for a price spike, but it also lifted the stock prices of US oil producers, which have. With pressure likely to be exerted on buyers of Iranian crude in Europe and elsewhere in Asia, Iran's output could easily drop by a million barrels a day by the end of the year.

The output gain is nominal.

"Each country which has produced less (than its allocation) can produce more". Those which can not, will not.

State oil company Saudi Aramco had anticipated this week's decision and was already ramping up output, Al-Falih said.

Also, others with high production levels will not be allowed to fill the gap.

Storage has fallen as Gulf Coast refiners have soaked up crude that was available at a discount, said Bob Yawger, director of Energy at Mizuho. That compares with the 1.97 million barrels permitted under the agreement. The measure has helped rebalance the market in the past 18 months and lifted oil to around $75 per barrel from as low as $27 in 2016.

Kazempour has said that Venezuela's supply should recover, at least partially, in the next three or four months.

Following Saturday's meeting between OPEC and its allies, the bloc will gather again in September, and on December 3, to discuss further steps to stabilize the global energy market.

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