Prices Dip Slightly on Reports Iran May Agree to Small Production Hike

Oil bumps up on US inventories decline, WTI pokes back into $65

Oil officials from OPEC and its allies started to arrive in Vienna for this week's meeting, which is expected to be one of the most contentious summits in years, as Iran firmly opposes a Saudi-Russia-led production increase proposal, while a US shale executive urged OPEC to act to prevent oil prices from surging to $100 that will hurt both the cartel and Texas producers as it would dent demand.

Speaking at the same event in Vienna, Iranian Oil Minister Bijan Namdar Zanganeh reiterated his country's resistance to hiking oil output and accused Trump of trying to politicise OPEC.

"I'm confident that at the end of the day reason will prevail", Saudi Energy Minister Khalid Al-Falih told reporters in Vienna after a succession of meetings. 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.

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.

Some OPEC members have been opposed to a production increase, and others don't want to go as far as Saudi Arabia. "We expect from OPEC and its members a commitment to step in (and) more than fill the gap to ensure sustainable prices", Minister of Petroleum & Natural Gas Dharmendra Pradhan said at a seminar in Vienna.

OPEC will discuss possible changes to the supply-cut deal in the Austrian capital later this week. "Stay tuned." A decision to increase output could be taken with Iran refusing to sign up, as has happened before in Opec.

Trump has in recent months repeatedly blamed OPEC for a spike in oil prices, but Zanganeh said it was USA sanctions on Iran and Venezuela that had fuelled fears of a supply crunch and put pressure on prices.

The week ahead still sees a major and tense OPEC meeting on the table. Zanganeh was due to attend a ministerial committee on Thursday, two sources said. Opposition within OPEC does not want to raise production limits for fear of another decline in oil prices hampering government coffers, while Saudi Arabia and Russian Federation are looking to stabilize oil prices after a run up the charts that saw crude hit multi-year highs recently. Iran is usually not part of the committee, which groups Russia, Saudi Arabia, the United Arab Emirates, Oman, Kuwait, Algeria and Venezuela.

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