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OPEC Meets Russia, Allies to Clarify Production Hike

OPEC Meets Russia, Allies to Clarify Production HikeOPEC Meets Russia, Allies to Clarify Production Hike

OPEC meets Russia and other allies on Saturday to clinch a new deal for raising oil output, a day after agreeing a production hike within the group itself but confusing the market as to how much more oil it will pump.

The Organization of Petroleum Exporting Countries announced its OPEC-only agreement on Friday, but gave no clear output targets. Russia and other non-OPEC oil producers will now meet OPEC to secure their participation in the pact.

Benchmark Brent oil rose by $2.5 or 3.4% on Friday to $75.55 a barrel, Reuters reported.

US President Donald Trump was among those wondering how much more oil OPEC will deliver.

“Hope OPEC will increase output substantially. Need to keep prices down!” Trump wrote on Twitter after OPEC announced its decision.

The United States, China and India had urged oil producers to release more supply to prevent an oil deficit that could undermine global economic growth.

OPEC said in a statement that it would raise supply by returning to 100% compliance with previously agreed output cuts, but gave no concrete figures.

Saudi Arabia said the move would translate into a nominal output rise of around 1 million barrels per day, or 1% of global supply, for OPEC and non-OPEC producers.

Iraq said the real increase would be around 770,000 bpd because several countries that had suffered production declines would struggle to reach full quotas. Iran said the real increase could amount to as little as 500,000 bpd.

Russian Energy Minister Alexander Novak said on Saturday he was happy with the decision even though he had previously pushed OPEC and non-OPEC to raise output by as much as 1.5 million bpd.

“At this stage, the 1 million is quite rational,” he told reporters after arriving in Vienna, Austria, where OPEC is headquartered.

 

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