Oil prices rise ahead of OPEC, China tariffs loom over United States prices

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Outages due to the troubles in Nigeria and Venezuela's oil industries more than offset higher output from Saudi Arabia, Iraq and Algeria as May production fell 1,00,000 b/d from the previous month.

Conversely, prices were supported by collapsing production from Venezuela and anticipated resistance from other OPEC members to increase production at the June 22 meeting in Vienna in Austria. Some OPEC members back increasing output by the lower end of the 300,000 to 600,000 barrel a day range, one of the people said.

The oil ministers of the OPEC cartel are arriving in Vienna to discuss this week whether to increase production of crude oil and help ease the price of global energy.

Analysts expect the group to discuss an increase in production of about 1 million barrels a day, ending the output cut agreed on in 2016.

This suggests that there has been a rebalancing after years of an overwhelming oversupply of the commodity; equally, it could also point to underlying concerns that have been evident for some time, that some members no longer wish to comply with OPEC's production cut deal.

Retail prices of petrol and diesel are ruling at Rs 75 a litre and Rs 68 a litre amid the global surge in crude prices.

Since OPEC operates on the principle of unanimity, analysts expect some sort of compromise agreement to be thrashed out by Saturday.

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OPEC officials are also working on putting the cooperation between the cartel, Russian Federation and other oil producers - the so-called OPEC+ group now comprising 24 nations - on a permanent footing.

Two OPEC sources told Reuters that even Saudi Arabia's Gulf allies Kuwait and Oman were against big, immediate increases in output.

Greg McKenna, chief market strategist at futures brokerage AxiTrader said there would likely be oil price volatility in the week ahead of the meeting. That could keep a cap on prices and limit how much money Opec makes at higher production levels.

"It's really a double whammy for Iran", Smith says, "from the perspective that because sanctions are being placed on them, they're not going to be able to export as much, because they probably won't be able to send crude into Europe".

China accounted for 23% of total US crude exports of 1.67 million b/d in March, according to data from the US Energy Information Administration. "We will raise this issue there", the oil minister told reporters here at a CII conference. China said it would impose tarrifs on a variety of U.S. goods, including crude and gasoline, in response to President Donald Trump's $50 billion levy on Chinese imports. Brent crude jumped $1.55 to $74.99 a barrel.

From outside, Trump is attacking the cartel on Twitter for artificially inflating prices and lobbying hard behind the scenes for a significant production increase.

Resistance is being led by Iran, deeply wary of any move by regional rival Saudi Arabia that could push down oil prices at a time when Tehran faces renewed sanctions following US President Donald Trump's decision to quit its worldwide nuclear deal, which is likely to send the country's oil exports plummeting. Well, we have to wait until the price reaches the 50 SMA, don't we?

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