OPEC rift deepens ahead of crucial meeting

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Tehran had bridled at complaints on Twitter by U.S. president Donald Trump that the cartel was artificially inflating oil prices, which touched $80 a barrel last month.

Prices are likely to remain volatile even after OPEC's decision because the trade conflict between the USA and China could escalate.

Iran has edged away from a threat to veto any agreement that would raise output, while Saudi Arabia has put forward a plan that would add 600,000 barrels a day - about 0.5 percent of global supply - smaller than the 1.5 million increase Russian Federation proposed.

OPEC's spare production capacity has shrunk to less than 2 million barrels per day (bpd) and is expected to fall to less than 1 million bpd by the end of 2019.

While market fundamentals are healthy, large crude-consuming countries are anxious about a looming supply shortfall because of underinvestment in new oil and gas projects, he said.

OPEC has agreed to increase oil production by one million barrels a day after a stormy meeting that saw Iran walk out of negotiations. Opinions vary on what the sweet spot for oil prices is but analysts suggest somewhere in the region of $60 to $70 per barrel for brent crude oil.

Iraq's oil minister, Jabbar Ali Hussein Al-Luiebi, sounded more optimistic about a deal, saying "we are after the stabilization of the market".

Exports surged to an unprecedented 1.76 million bpd in April from 1.67 million bpd in March.

Saudi Arabia said the move would translate into a nominal output rise of around 1 million barrels per day (bpd), or 1 percent of global supply.

"I think it's going to be a bad meeting", he told CNBC on the sidelines of a press conference with Barkindo.

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U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading higher shortly before the regular session opening on Friday.

Opec sources said the final compromise also depended on whether Opec agreed to mention United States sanctions in the group's communique, an important point for Iran, which has blamed USA measures against Tehran for the recent rise in oil prices.

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

High volume oil consumers like India seem to be heading for some relief, with crude oil prices falling sharply on Thursday as major oil exporters indicated that a consensus on increasing crude oil production was near. That has since then helped push up the price of oil by nearly 50 percent.

Chinese buyers are already starting to scale back orders, with a drop in supplies expected from September.

USA crude production has soared to record highs, and is expected to continue to come to the market.

Venezuela likewise has railed against USA sanctions that have hampered state oil company PDVSA's ability to finance its operations. That was the biggest premium since August 2014.

OPEC did not say which of its members would supply the additional crude, which should start to flow into the market in July.

USA drillers cut the number of rigs drilling for oil by 1 to 862, the first cut in 12 weeks, according to a weekly report from GE's Baker Hughes division.

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