Oil prices rise ahead of OPEC’s June 22 meeting

High oil prices hurting fiscal balance, says Pradhan

High oil prices hurting fiscal balance, says Pradhan

The Organization of the Petroleum Exporting Countries meets on Friday to decide on output policy amid calls from major consumers such as the United States and China to cool down oil prices and support the global economy by producing more crude.

Reuters, quoting unnamed OPEC sources, said Iran had demanded that United States sanctions be mentioned in the group's post-meeting communiqué.

The Iran walk-out shows the tension within OPEC after the US, China and India put pressure on the cartel to boost production to ease the pain of high oil prices.

Iran had balked at the request because it faces sanctions after President Donald Trump ripped up an global nuclear agreement.

"Investor sentiments are shifting and they're no longer expecting a 1 million barrel a day rate hike", Benjamin Lu, a commodities analyst at Phillip Securities Singapore, told AFP. "Such a decision, if implemented, would have a large impact on the supply-and-demand fundamentals by creating implied stock builds averaging 0.9 million b/d in H2 2018, and 1.8 million b/d in 2019", the group said in email on Wednesday. Trump has used Twitter to complain about high oil prices - and blame OPEC - twice since April.

In an historic agreement in late 2016 the OPEC+ group of 24 nations made a decision to cut 1.8 million barrels of production to revive the oil market from its biggest slump in a generation.

Brent oil prices rose 1% to 74.03 in London trading on Friday.

The kingdom's plan involves a complex calculation based on how much the group has cut production beyond the initial target of 1.8 million barrels a day set in 2016, said delegates, asking not be named discussing private meetings.

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"I don't think we can reach agreement" on the proposal, Zanganeh said as he left the meeting.

After almost two years of relative unity, the talks in Vienna this week have found Opec divided. Consecutive increase in inventory is not good for a stable market price so also is a sudden fall in inventory due to higher oil price.

Earlier this week, Zanganeh left the door open for a deal, saying Opec members that had overdelivered on cuts in recent months should comply with agreed quotas. Iran is usually not part of the committee, which includes Russia, Saudi Arabia, the UAE, Oman, Kuwait, Algeria and Venezuela.

Zanganeh has said that if Opec returned to regular compliance, the group would raise output by around 460,000 bpd.

Zangeneh also said on Friday OPEC would change the structure of the current deal, but did not elaborate.

Falih also said the real increase would be smaller than the nominal gain of 1 million bpd, meaning a compromise with Iran remained possible.

"OPEC is listening to consumers", Bob Dudley, the chief executive of BP Plc, said on the sidelines of the OPEC conference in Vienna.

"We need to continue to tread carefully; none of us want to see the return of the kind of volatility that allows pessimism to return to the markets", Suhail Mohamed Al Mazrouei, the UAE energy minister and president of the Opec conference, said.

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