The oil price is higher Friday as the highly anticipated latest OPEC meeting has resulted in an agreement in principle, to raise the level of oil output. Meeting attendees agreed to reduce the compliance to its output cap to 100%.
That will translate into an output increase as compliance to the cap has regularly exceeded requirements, meaning total weekly output levels were below the agreed cap.
By 1520 BST, the price of Brent crude oil was up 2.03% at $74.28 per barrel. The price of US WTI crude, meanwhile, was 2.53% at $67.20.
Oil ministers share hike news
The regular OPEC meeting in Vienna is always closely watched. However, given the comments that were being made ahead of this one, it was expected to be a particularly interesting meeting.
Russia’s oil minister Alexander Novak told the media that OPEC and non-OPEC meeting attendees had agreed to a 1-million-barrels per day oil price increase, after discussions Thursday.
However, Saudi energy minister Khalid al-Falih added that the 1 million barrels per day increase was only in theory – in reality it will be around a 600,000 barrels per day rise.
OPEC meeting concludes
While it didn’t give a number, the formal OPEC communique after the conclusion of the meeting showed that an output increase had been agreed – albeit still within the confines of the previously agreed cap.
“Noting that OPEC Member Countries have exceeded the required level of conformity (to the output cap) that had reached 152% in May 2018,” OPEC said.
“Accordingly, the Conference hereby decided that countries will strive to adhere to the overall conformity level of OPEC-12, down to 100%, as of 1 July 2018 for the remaining duration of the above-mentioned resolution and for the JMMC to monitor and report back to the President of the Conference,” OPEC added.
Reports also suggest that the final agreed communique excludes critical US comments that some members had wanted to include.