OPEC oil ministers gather to discuss production increase

OPEC oil ministers gather to discuss production increase

India's engagement with OPEC is important as India sources about 82% of crude oil, 75% of natural gas and 97% of LPG from OPEC member countries.During the visit Pradhan will deliver a key note speech on "Sustainable Global Energy Future". U.S. President Donald Trump has continued to criticize OPEC on his Twitter account.

"The tariff war between the United States and China is showing signs of escalating", said Sukrit Vijayakar, director of energy oil consultancy Trifecta.

The oil ministers of the OPEC cartel are arriving in Vienna to discuss this week whether to increase production of crude oil and help ease the price of global energy.

The market was expecting an increase of around 1-1.5 million barrels.

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The expectation among oil analysts appears to be that the Saudis and Russian Federation will try to come out of the OPEC meeting in Vienna with support for a measured and gradual increase in production, adding perhaps 500,000 barrels per day, but being prepared to respond to any material shortfalls in supply as the Iranian sanctions start to bite. "It's going to be the most interesting meeting for a while". Within the group, Venezuela's oil output has collapsed to the lowest since the 1950s due to industry mismanagement, and Iran's petroleum exports are subject to renewed US sanctions. So as Iran cuts back by 500,000 barrels a day, something like that, Saudi is talking about filling that gap there. As U.S. ally, they raised their production levels slightly to appease Trump and keep the prices from further rising.

In the run-up to meetings of OPEC and its allies in Vienna this week, several nations have floated plans for production increases, but no consensus has emerged for what's likely to be a fractious meeting.

Suhail bin Mohammed Faraj Faris Al Mazrouei, also President of the Organisation of Petroleum Exporting Countries (OPEC) Conference for 2018, was speaking ahead of 174th meeting which kicks off on June 22 in Vienna, Austria.

By contrast, Saudi Arabia, the cartel's biggest producer and a fierce regional rival to Iran, could have the room to increase output more — and make more money — to make up for the shortfall in countries like Iran.

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Tankers waiting to load more than 24 million barrels of crude, nearly as much as state producer PDVSA shipped in April, are sitting off the Opec member's main oil port.

After two years of squeezing output to drain a global glut, prices have rallied and inventories are closer to typical levels, sparking debate on the direction of policy in the second half of the year.

The increase of 300,000 to 600,000 barrels a day - above the current OPEC+ production of about 32 million barrels a day - is a less theoretical number.

On the other side, there are OPEC members who would like the price to stay just where it is because they have no spare production capacity and would gain no benefit from any increase in output. Some OPEC members back increasing output by the lower end of the 300,000 to 600,000 barrel a day range, one of the people said. The amount of increased oil output that is being discussed in the framework of the OPEC + agreement is fully correlated with the decline made by Venezuela in the last 1.5 years.

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According to the International Energy Agency, only a handful of countries in the OPEC+ alliance are realistically able to boost production in the short term.

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