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Oil rises after OPEC agrees to lift output
News:
- Oil prices rose almost 3% as OPEC agreed to modest increase in output.
OPEC:
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Important facts:
2. The Organsiation of the Petroleum Exporting Countries (OPEC), meeting in Vienna, agreed to boost output after Saudi Arabia persuaded Iran to cooperate in efforts to reduce the crude price and avoid a supply shortage.
3. The Organsiation expected to increase production by about 1 million barrels per day(bpd), or 1% of global supply.
4. The decision was taken to compensate for losses in production at a time of rising global demand.
5. Benchmark Brent crude jumped $ 2.19 a barrel to a high of $ 75.24 before slipping to about $ 75.
6. U.S. light crude was $ 1.80 higher at $ 67.34.
7. The real increase will be smaller because recently underproduced oil countries will struggle to return to full quotas while other producers will not be allowed to fill the gap.
8. The OPEC group started withholding supply because:
- Amid strong demand
- Market tightened significantly
- Triggering calls by consumes for higher supply.
9. There is shortage of supply because :
- Declining production in Venezuela and Libya
- Risk of lower output from Iran as a result of U.S. sanctions
