Crude prices to become cheaper or dearer? Opec to decide today

Iran has objected to having members with additional capacity such as Saudi Arabia fill Venezuelan output gaps.

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.

"We're hoping to come out of this with a reasonable decision", Saudi Energy Minister Khalid al-Falih told reporters moments before the OPEC meeting opened.

Oil prices rose more than 1 percent on Friday as OPEC tried to agree a deal to increase output to compensate for losses in production at a time of rising global demand.

In the two-day meet, India will pitch for "responsible" crude pricing by oil producers' cartel OPEC, Union Minister Dharmendra Pradhan had said as petrol and diesel prices skyrocketed in the country.

Crude Oil: OPEC tentatively agree to raise production by 1mln bpd, which will represent a real production increase of roughly 600k bpd.

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.

Iran is particularly vocal about its objections as it braces for the impact of fresh USA sanctions on its oil exports after President Donald Trump quit the global nuclear agreement.

Sources said Saudi Arabia did not want to be seen as putting too much pressure on Iran and hence Russian Federation was instead trying to convince Tehran.

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When OPEC and its allies, which include Russia, Kazakhstan and Mexico, agreed to cut output in late 2016, they announced a 1.8 million-barrel-a-day reduction.

The market is contending with exactly how much output will change.

Prices of Brent Crude were down to $73.34 on Thursday, after highs earlier this month of around $80, while U.S. light crude CLc1 dropped $1 to $64.71.

A production increase on Friday would undo a cut agreed on in late 2016 that has since then helped push up the price of oil by nearly 50 percent.

"This shows that China is a significant outlet for United States crude exports and the early indications are that the exports would be much higher in Q2 2018 given the lower WTI-Brent differential which made the arbitrage to Asia look more attractive", Sivanandam noted.

Our economy is still tied to a product and if you look at the improvement in the economic indices, the oil and gas industry was the basic factor."As long our politics on oil continues, we will still find ourselves in this unstable state of mind because what is happening out there is beyond our control and whatever OPEC will decide is beyond our control".

Analysts have called this week's OPEC talks the most fractious and politically charged in years.

"Allocating to Saudi Arabia part of the quota of countries that cannot increase output could be a technical solution, but may not be a political one", Al-Falih said.

"This puts Saudi Arabia in a tough position, as unanimity is needed for any accord to be reached", it added.

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