OPEC agrees production increase

Oil prices rose by about 2% on Friday following news that OPEC delegates had agreed a modest production increase starting next month.

Arch-enemies Saudi Arabia and Iran had agreed on a global production increase of 1 million bopd, or about 1% of total output, Reuters reported.

In real terms, however, the hike is expected to be more limited since several producers, including Libya and Venezuela, have seen their production decimated by violence and economic chaos. US sanctions are widely expected to reduce Iran’s exports later this year as well.

“The global economy is strong, oil demand remains robust, the market is evidently rebalancing, and the return of more stability has been welcomed by all stakeholders,” Suhail Mohamed Al Mazrouei, the UAE’s minister of energy and industry and the president of OPEC’s conference, said in a statement at the start of the meeting.

“In the period to 2040, the required global oil sector investment in OPEC’s World Oil Outlook is estimated to be USD 10.5 trillion, with oil demand set to surpass 111 million barrels a day by 2040,” he added.