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OPEC for increase in oil output
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- The Organization of the Petroleum Exporting Countries (OPEC), meeting in Vienna, agreed to boost output from July after its de facto leader Saudi Arabia persuaded archrival Iran to cooperate in efforts to reduce the crude price and avoid a supply shortage.
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- Oil prices rose almost 3%, as OPEC agreed to a modest increase in output to compensate for losses in production at a time of rising global demand.
- Benchmark Brent crude jumped $2.19 a barrel, or almost 3%, to a high of $75.24 before slipping to about $75 by 1305 GMT. U.S. light crude was $1.80 higher at $67.34.
- The group started withholding supply in 2017 to prop up prices.
- Amid strong demand, the market has since tightened significantly, pushing up crude prices and triggering calls by consumers to increase supplies.
- The group agreed that OPEC and its allies led by Russia should increase production by about 1 million barrels per day (bpd), or 1% of global supply.
- Declining production in Venezuela and Libya, as well as the risk of lower output from Iran as a result of U.S. sanctions, have all increased market worries of a supply shortage.
- Oil prices have been on a rollercoaster ride over the last few years, with Brent trading above $100 a barrel for several years until 2014, dropping to almost $26 in 2016 and then recovering to more than $80 last month.
OPEC
- Organization of the Petroleum Exporting Countries (OPEC) is an inter-governmental organization of 14 nations as of February 2018, founded in 1960 in Baghdad by the first five members (Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela).
- OPEC's stated mission is "to coordinate and unify the petroleum policies of its member countries and ensure the stabilization of oil markets.
- As of 2016, the 14 countries accounted for an estimated 44 percent of global oil production and 73 percent of the world's "proven" oil reserves, giving OPEC a major influence on global oil prices that were previously determined by American-dominated multinational oil companies.
- It is headquartered in Vienna, Austria, since 1965.
Source
The Hindu, Indian Express.