VIENNA (Reuters) - OPEC edged closer on Thursday toward raising oil output, with Iran softening its opposition to an increase and Saudi Arabia warning of supply shortages and price rallies if production remained stable.
A production rise of about 1 million barrels per day (bpd) or around 1 percent of global supply was emerging as a consensus for the group and its allies, OPEC sources told Reuters, adding that Iran could agree under certain conditions.
The Organization of the Petroleum Exporting Countries meets on Friday to decide output policy amid calls from top consumers such as the United States, China and India to cool down oil prices and support the world economy by producing more crude.
Russia, which is not in OPEC, has proposed producers raise output by 1.5 million bpd. Saudi Energy Minister Khalid al-Falih said on Thursday the world needed at least an extra 1 million bpd to avoid a shortage in the second half of 2018.
OPEC and its allies have since last year been participating in a deal to cut output by 1.8 million bpd. The measure has helped rebalance the market in the past 18 months and lifted oil LCOc1 to around $73 per barrel from as low as $27 in 2016.
For graphic on OPEC compliance in May - Reuters Survey click reut.rs/2JRWnw1
But unexpected outages in Venezuela, Libya and Angola have effectively brought supply cuts to around 2.8 million bpd in recent months. Iran’s output is also likely to fall in the second half of this year due to new U.S. sanctions.
Iran, OPEC’s third-largest producer, has so
