OPEC agrees to boost oil production after reaching Iran compromise

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The United States, China and India had urged oil producers to release more supply to prevent an oil deficit that could undermine global economic growth.

US investment bank Jefferies said an increase in "the range of 450-750,000 bpd seems the most likely outcome" of the meeting.

Iran, OPEC's third-largest producer, has so far been the main barrier to a new deal as it said on Tuesday OPEC was unlikely to reach an agreement and should reject pressure from U.S. President Donald Trump to pump more oil.

On Friday afternoon Opec confirmed reports that a deal had been struck to reverse some of the cuts in place since 2016.

Saudi Arabia has enough spare capacity to offset those losses and keep a lid on prices, but Energy Minister Khalid Al-Falih acknowledged on Thursday that such a move isn't politically palatable for his fellow OPEC members.

OPEC could distribute the increase unevenly to allow those that can produce more - Saudi Arabia, Kuwait and the United Arab Emirates - to fill in for those that cannot, although this could face resistance from countries reluctant to give up market share such as Iran.

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Falling production in Venezuela and Libya, as well as the risk of lower output from Iran as a result of US sanctions, have all increased market worries of a supply shortage.

The cartel has overcome opposition from Iran and will raise output by one million barrels per day. "How much oil do we need?. around 1 million (barrels per day, bpd) probably".

But production problems in Venezuela and Libya have seen about 2.8 million barrels removed from daily global supply.

Benchmark Brent crude LCOc1 was up $1.05 a barrel at $74.10 by 0925 GMT. Its oil minister, Bijan Namdar Zanganeh, told reporters that, "Some of the countries are against any increase, and ask them".

After almost two years of relative unity, the talks in Vienna this week have found Opec divided.

Oil prices rose after OPEC's announcement, which analysts cited as evidence that investors believe the actual increase in production will be smaller, about 600,000 to 700,000 barrels a day.

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The International Energy Agency, which represents consuming nations, expects demand to grow more slowly in the second half of this year partly due to rising oil prices - but still 1.35 million barrels a day higher than the same period in 2017.

On Wednesday Zanganeh had left the door open for a deal, saying OPEC members that had overdelivered on cuts in recent months should comply with agreed quotas.

By avoiding setting individual country targets, the deal appears to give Saudi Arabia the leeway to produce more than its official OPEC target and fill the gap left by those like Venezuela who can not pump enough to meet their official allocation.

Prospects for a deal to boost oil production from OPEC and its partners dimmed sharply Thursday, potentially worsening divisions within the oil group.

"We are going to change this structure (of one million bpd)", he said as the meeting kicked off.

Friday's meeting could be a tense affair.

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The price of oil jumped after the announcement, with the worldwide benchmark, Brent, gaining 2.5 percent to $74.84 a barrel in London, and US crude climbing 4.9 percent to $68.72 a barrel in afternoon trading in NY - on track for its biggest one-day rise since OPEC agreed in November 2016 to cut production.

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