OPEC, Russia prepared to raise oil output under US pressure: report

Saudi Arabia and Russia are discussing raising OPEC and non-OPEC oil production by some 1 million barrels a day, Reuters reported, citing sources familiar with the matter.

Meanwhile, Mohammad Barkindo OPEC’s chief said earlier a complaint from US President Donald Trump over high prices had triggered the idea of upping output. Trump tweeted last month that OPEC had “artificially” boosted oil prices.

Riyadh and Moscow are prepared to ease output cuts to calm consumer worries about supply adequacy, Saudi Arabia’s Khalid al-Falih and Russia’s Alexander Novak both said on Friday, adding that any such move would be gradual.

Raising production would ease 17 months of strict supply curbs amid concerns that a price rally has gone too far, with oil LCOc1 having hit its highest since late 2014 at $80.50 a barrel this month.

Oil prices fell more than 3 percent towards $76 a barrel on Friday as Saudi Arabia and Russia said they were ready to ease supply curbs.

The Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia have agreed to curb output by about 1.8 million barrels per day (bpd) through 2018 to reduce global stocks, but the inventory overhang is now near OPEC’s target. In April, pact participants cut production by 52 percent more than required.

A rise of about 1 million bpd would mean compliance would be at about 100 percent of the agreed level, rather than exceed it, sources said.

Initial talks are being led by the energy ministers of OPEC kingpin Saudi Arabia and Russia at St. Petersburg this week along with their counterpart from the United Arab Emirates, which holds the OPEC presidency this year, the sources said.

OPEC and non-OPEC ministers meet in Vienna on June 22-23, and the final decision will be taken there.