Iranian Oil Minister Bijan Zanganeh said on Wednesday that an OPEC output increase could total around 460,000 bpd. Saudi Energy Minister Khalid al-Falih said today the world needed at least an extra 1m barrels per day to avoid a shortage in the second half of 2018.
Mohammed Barkindo, Opec secretary general.
Oil demand has been rising faster than expected, pushing prices higher despite a big increase in USA oil output. "More oil on the market means relatively lower prices for consumers".
The upbeat Saudi comments contrasted with the somber tone from the Iranian delegation. She said OPEC ministers had acted as "their own worst enemies" by warning this week of a potential shortage of around 2 million barrels per day in the second half of 2018.
Asked whether he supports increasing production, he replied: "Some of the countries are against any increase, and ask them".
Joe McMonigle, an analyst with Hedgeye who is in Vienna to observe the OPEC proceedings, said he doubts the producer group would approve any language on sanctions. Their proposal would share out a quota increase of 1 million barrels a day between all members of the group. Iran has wanted to keep the initial deal intact, but the Saudis and Russian Federation want to push for an agreement to increase output to stabilize prices and prevent a supply shortfall from materializing in the second half of 2018. However, he indicated that some countries could pick up production if others lag. Iran faces constraints on its oil exports after Trump reimposed sanctions on May 8. In practice, the reduction was even deeper due to production problems. The measure had helped rebalance the market in the past 18 months and lifted oil to around $75 per barrel from as low as $27 in 2016. That surge prompted the US president to complain on Twitter that the cartel was artificially inflating prices. Benchmark U.S. crude gained $1.02 to $66.56 per barrel in electronic trading on the New York Mercantile Exchange.
Trump's involvement makes it hard for Tehran to accept a compromise.
Oil prices affect everything connected with a modern economy, from movement of goods and services, to the amount of disposable incomes for ordinary consumers. Trump has used Twitter to complain about high oil prices - and blame OPEC - twice since April.
"We've seen investments start flowing back, certainly it's flowing back in the (United States) with short-cycle oil, the shale".
While Saudi Arabia's cutting by more than required has helped Opec's compliance, involuntary reductions in Venezuela amid economic crisis and in Angola due to natural decline have had a larger impact and can not be reversed at short notice.