OPEC enters meeting that could set direction of oil prices

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The Organisation of the Petroleum Exporting Countries (OPEC) meets on Friday to decide output policy amid calls from major consumers such as the United States and China to cool down oil prices and support the global economy by producing more crude.

That reflects a one million barrel-a-day adjustment on paper to the production cuts implemented by the Organisation of Petroleum Exporting Countries and its allies, the delegate said, asking not to be named because the information is private.

OPEC Secretary-General Mohammad Barkindo said he was confident there would be a deal when the producer group meets in Vienna on Friday.

Saudi Energy Minister Khalid Al Falih, asked whether he expected an easy meeting on Friday, said: "We will find out".

"Our customers have spoken loudly and we must listen to them", Al-Falih said before the ministerial talks on Thursday.

Iran's Oil Minister Bijan Namdar Zanganeh walked out that meeting, telling reporters he did not think an agreement could be reached. Trump has used Twitter to complain about high oil prices - and blame OPEC - twice since April.

Crude Oil: OPEC tentatively agree to raise production by 1mln bpd, which will represent a real production increase of roughly 600k bpd.

Bailey, however, said he anticipates the level of production will likely hold, because oil giants like Saudi Arabia - the de facto leader of OPEC - don't want to see prices fall.

Front-month US crude futures extended their rally during the session, trading as much as $1.51 a barrel above the second month contract.

In an historic agreement in late 2016 the OPEC+ group of 24 nations made a decision to cut 1.8 million barrels of production to revive the oil market from its biggest slump in a generation.

Tensions between Iran and Saudi Arabia broke out days before OPEC's meeting on Friday in Vienna, with Tehran indicating it would probably not abide to the cartel's plans to cut production.

Sources said Saudi Arabia did not want to be seen as putting too much pressure on Iran and hence Russian Federation was instead trying to convince Tehran. Oil prices stabilized on Wednesday, with the Brent crude unchanged at $75 per barrel.

But the proposal has run into resistance from Iran, Iraq and Venezuela, who would struggle to immediately raise output and fear losing market share and revenues if other countries open the spigots. A big OPEC deal- adding more than 1 million barrels - could cause prices to dip into the $2.60s or $2.70s this summer, he said.

Some analysts believe that Saudi Arabia needs a Brent price closer to $90 to cover its domestic spending but is feeling pressure from the United States to head off rising prices by boosting output.

"OPEC is listening to consumers", Bob Dudley, the chief executive of BP Plc, said on the sidelines of the OPEC conference in Vienna.

The deal looked to be in line with many analysts' forecasts.

While Saudi Arabia's cutting by more than required has helped Opec's compliance, involuntary reductions in Venezuela amid economic crisis and in Angola due to natural decline have had a larger impact and can not be reversed at short notice.