Iran may accept OPEC oil production increase with conditions: Iranian weekly

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The Organisation of the Petroleum Exporting Countries (Opec) consists of 14 oil exporting nations aiming to control the supply and price of global oil.

OPEC has a history of hard meetings as well as clashes between Iran and Saudi Arabia.

For China, the world's biggest importer of crude oil, relatively higher Brent prices means oil would become more expensive.

Oil prices soared on Friday after oil producers agreed to modest crude output increases to compensate for losses in production at a time of rising global demand. Trump wrote on Twitter after OPEC announced its decision.

But analysts said trade concerns and disagreements within the Organization of the Petroleum Exporting Countries (OPEC) over boosting supply continue to loom over the market.

Global oil prices rose Friday by over one percent on the day as analysts expected any OPEC+ crude output increase to fall short of the original target.

"Today's EIA report appeared unequivocally bullish to WTI given a much larger than expected crude stock draw of nearly six million barrels that was more than double our anticipated increase", Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois, said in a note.

Iran, OPEC's third-largest producer, had demanded OPEC reject calls from US President Donald Trump for an increase in oil supply, arguing that Trump had contributed to a recent rise in prices by imposing sanctions on Iran and Venezuela. Washington made the request just before Trump pulled out of the Iran nuclear deal and restored sanctions on Tehran, the Saudis' chief regional rival, Reuters reported.

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Saudi oil minister Khalid Al-Falih told reporters this morning there would not be an immediate flood of oil into the market, suggesting the impact would not be seen until the end of the summer, the Guardian reports.

Ecuador said OPEC and its allies could agree to a compromise increase in output of around 0.5-0.6 million bpd.

The production increase will partly undo a 1.2 million barrel cut OPEC agreed on in late 2016 that has helped push up the price of oil.

Currently, Libya is producing only 450,000 b/d after clashes at oil ports, Venezuela is declining about 40,000 b/d per month, and Iran's exports are set to drop later in the year because of re-imposed sanctions.

But the cushion of spare capacity is already low and will shrink further as OPEC boosts its output, leaving the market without much capacity to absorb further disruptions.

Russia, which is not in Opec, has proposed producers raise output by 1.5 million bpd. USA light crude was $1.00 higher at $66.54.

The Organization of the Petroleum Exporting Countries and allies including Russian Federation have since January a year ago been participating in a deal to cut output by 1.8 million bpd. The minister said that amounts to "a little bit less than 1 million barrels". Indeed, non-compliance with the OPEC deal is the easiest and most likely route for those states that no longer feel it is necessary.

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