OPEC reaches deal to raise oil output from July

The Organization of the Petroleum Exporting Countries is meeting in Vienna in an effort to cool the market after oil prices rose to $80 a barrel.

Complete collapse In June 2011 OPEC talks broke down, prompting Ali Al-Naimi, then the Saudi oil minister, to complain he just had had "one of the worst meetings ever".

Oil prices fell after Al-Falih's comments, with benchmark Brent crude losing as much as 2.4 percent to $72.94 a barrel in London. Outages in some nations and deeper-than-agreed cuts by others have made the actual reduction larger by about 1 million barrels a day.

He said that the world could face a supply deficit of up to 1.8 million barrels a day in the second half of the year, and maintained that it is OPEC's responsibility to address that imbalance.

Venezuela, in the throes of an economic crisis, is also opposed to easing the cartel's output curbs, as are several other countries, including Iraq and Nigeria, who would struggle to immediately increase production.

He was echoing comments from his Iranian counterpart, Bijan Namdar Zanganeh, who had rejected any production increase when he arrived in Vienna on Tuesday, saying OPEC shouldn't be doing Trump's bidding.

The preliminary accord allows for an additional 600,000 barrels a day of oil to flow onto the market, about 0.5 per cent of global supply, said a delegate.

There's a good reason for the two countries' opposition - neither have the ability to increase their own production.

Iran is understood to want a coded critique of the U.S., which recently ended an worldwide nuclear agreement with Iran, in the final Opec agreement on Friday.

The Bloomberg headline earlier says that OPEC members have come to an agreement on principle for an output increase of 1 million bpd on paper.

Unlike Iran, both Russian Federation and Saudi Arabia now have ample room to increase production, analysts say. Zanganeh has said the president is to blame for high prices because of his unilateral withdrawal from the worldwide nuclear agreement and the imposition of fresh sanctions that could significantly curb Iran's crude exports.

"We want to prevent the shortage and the squeeze that we saw in 2007-08", Falih said, referring to a time when shortages sent premium-crude-oil prices soaring to an unprecedented $150 per barrel and ushered in a major boom-bust cycle that devastated the oil sector for a decade. Zanganeh has said the president is to blame for high prices because of his unilateral withdrawal from the worldwide nuclear agreement.

Also supporting prices was a drop in Libyan supplies due to the collapse of an estimated 400,000-barrel storage tank. "OPEC is not part of the Department of Energy of the United States".

"OPEC is listening to consumers", Bob Dudley, the chief executive of BP Plc, said on the sidelines of the OPEC conference in Vienna.

With assistance from Annmarie Hordern, Manus Cranny, Nayla Razzouk, Salma El Wardany, Laura Hurst, Julian Lee, Elena Mazneva, Francois de Beaupuy and Golnar Motevalli.

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