Oil falls as Opec nears deal to raise production


Resistance is being led by Iran, deeply wary of any move by regional rival Saudi Arabia that could push down oil prices at a time when Tehran faces renewed sanctions following US President Donald Trump's decision to quit its global nuclear deal, which is likely to impact the country's oil exports.

That would effectively mean a modest boost from producers such as Saudi Arabia that have been cutting more deeply than planned despite production outages in Venezuela and Libya.

USA crude futures rose almost 2 percent on Wednesday, supported by a drop in domestic inventories, while Brent edged down ahead of an OPEC meeting later this week that may result in increased global production.

The controls were introduced in 2017 to prop up prices.

"The most important thing is the consumers", Saudi Energy Minister Khalid Al-Falih said Thursday.

The odds of the Organization of Petroleum Exporting Countries reaching a deal on Friday have increased through the week. Saudi Arabia and Russia's desire to roll back production cuts has encountered fierce opposition from Iran and Venezuela, while U.S. President Donald Trump has lobbed the occasional rhetorical bomb at the cartel on behalf of consumers.

Benchmark Brent crude fell $1.10 a barrel to a low of $73.64 before recovering slightly to $73.74, down $1.00 by 0820 GMT.

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Analysts expect the group will consider an increase of somewhere around 1 million barrels a day.

If OPEC members and Russian Federation agree to pump more oil, that will reduce global capacity for spare production - reserves of crude that can be brought online quickly. The paper agreement would see production increase by 1 million barrels a day to bring the group back to target.

India is Iran's biggest oil client after China. However, because most countries can't increase production, that would probably translate to just 600,000 barrels coming back on to the market - an increase in global production of about 0.5 per cent.

Several other OPEC members, including Venezuela and Iraq, are also against major changes to the pact as they are unable to immediately boost production.

Trump's involvement in pressing for OPEC to act - which in addition to his tweets include a behind-the-scenes request for a 1 million-barrel-a-day supply hike - could make it hard for Tehran to accept a compromise.

Iranian Oil Minister, Bijan Zanganeh, said OPEC members that had over delivered on cuts in recent months should return to compliance with agreed quotas.

"Consumers are asking for more supply in the second half", said Saudi Arabia's Al-Falih. Off-topic, inappropriate or insulting comments will be removed.