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OPEC, Russia mull oil output increase

OPEC, Russia mull oil output increase

Mubasher: Saudi Arabia and Russia are considering the increase of crude output from Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC exporters by nearly 1 million barrel per day (bpd), according to reports on Friday.

The energy ministers of Saudi Arabia and Russia as well as their counterpart from the United Arab Emirates (UAE) will lead the preliminary talks in St. Petersburg this week, sources familiar with the matter told Thomson Reuters.

The increasing production would relax the strict curbs in place for 17 months on oil supply which led prices to soar, hitting past $80 per barrel (pb), amid concerns over reduced supply from Iran and Venezuela as well as US worries regarding hiking prices.

Moreover, it would lead commitment to the cut agreement to fall 100% from April’s figure of almost 152%, more for OPEC members than for non-OPEC countries, the sources said.

The final production figure is not decided yet “as dividing up the extra barrels among deal participants could be tricky,” the news agency said, citing the sources.

“Only a few members have the capability to increase production, so implementation will be complicated,” one source added.

The next meeting between OPEC and non-OPEC ministers is due to be held in Vienna on 22 and 23 June, where a final decision regarding the supply reduction deal, in which crude production was trimmed by about 1.8 million bpd until the end of 2018 would be taken.

By 11:34 am GMT, Nymex crudes plunged 2.09% to $69.23 pb, while Brent crude futures dropped 2.25% to $77.02 pb.