Oil ministers from the Organization of the Petroleum Exporting Countries meet on Friday in Vienna. Talks will follow on Saturday with non-OPEC oil producers. The negotiations are expected to be hard as Iran threatens to block the decision over production increase.
The boost of global oil output is an urgent requirement from top consumers: The United States, China and India. However, there is a strong possibility that the meeting will end without reaching an agreement unless Iran softens stance. Iran, which is OPEC’s third-largest producer, absolutely opposes to ease supply restrictions set in January 2017 due to US sanctions. Iran is the main obstacle to reach an agreement. The country has little to gain from a deal to raise OPEC output, as Trump’s fresh sanctions in May will limit Iran’s production by a third.
The 2017 decision for supply constraints has helped to clear a global supply which weighed on prices for years.
Brent which was above $80 a barrel last month, has fallen in recent weeks as Saudi Arabia has signalled its intentions to raise production.
OPEC’s meeting is held biannually.
MARKETS ahead of OPEC meeting
The dollar traded flat amid concerns over trade war escalation. The greenback recorded tiny losses for the week.
Against the Yen, the US Dollar remained almost unchanged at 110.14 yen amid concerns over the trade dispute between the United States and China.
The Sterling inched up to a 6-day high after BoE policy meeting. The BoE policy meeting revived expectations that the Bank of England will rise rates. However, the pound remained unchanged against the common currency.
The Euro dropped 0.2% to 2018 lows due to traders’ expectations that there would be an extended monetary divergence between EU and US central banks. For the week the single currency consolidated gains, up to 0.5% rise.
Oil prices edged up ahead of the OPEC meeting, above 1% as it seems that top suppliers will agree to increase output.
Sources: Reuters, Euronews, bbc.com