Oil falls as Opec nears deal to raise production

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OPEC, together with other key producers including Russian Federation, started withholding output in 2017 to prop up prices, but a tightening market in 2018 led to calls by major consumers for more supplies.

But according to former Exxon President Jerry Bailey, China is unlikely to risk further damaging its relationship with the U.S.by violating American sanctions. The arrangement runs to the end of 2018.

Iranian Oil Minister, Bijan Zanganeh, said OPEC members that had over delivered on cuts in recent months should return to compliance with agreed quotas. "OPEC is not part of the Department of Energy of the United States".

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.

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But OPEC officials are increasingly confident a deal will be reached.

"It would seem that an aggregate increase in production for OPEC+ of between 500,000 barrels per day (bpd) and 1 million bpd is the range that is being considered", Tchilinguirian said.

Saudi Arabia and its allies estimate that total cuts now amount to 2.8 million barrels. Russian Federation is pushing for an even larger quota increase of 1.5 million barrels a day.

The current ratio of agreed OPEC cuts versus agreed non-OPEC cuts is around 65 percent versus 35 percent.

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However, questions remain over Venezuela, Libya and Angola, whose declines can not be reversed at short notice.

OPEC energy ministers expressed optimism Thursday they were nearing a compromise on oil output policy, with Saudi Arabia acknowledging that a big production hike would be "politically unacceptable" to archfoe Iran.

Iran has signaled that it would oppose any Saudi move to fill other producers' supply gaps.

OPEC source also said that pressure for increased output was also coming from some non-OPEC members, especially Russian Federation, now supporting the position of Saudi Arabia.

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If the existing deal were retained and the Saudis felt a need to add more oil, Riyadh could increase output unilaterally, as it did after a meeting in June 2011 ended with no decision.