Oil futures traded sharply higher on Friday, after Iran’s oil minister appeared to oppose a deal to increase crude output at the closely followed OPEC summit in Vienna.
August light, sweet crude on the New York Mercantile Exchange CLQ8, +1.46% was recently up 82 cents, or 1.3%, at $66.36 a barrel. Brent crude LCOQ8, +1.81% rose 98 cents, or 1.3%, to $74.03 a barrel, after a finishing down 2.3% to $73.05 on Thursday, the lowest level since April 17 for the international benchmark.
Crude-oil futures fell Thursday on hopes Iran was warming to the idea of an output boost. Delegates from Organization of the Petroleum Exporting Countries and from producers outside the cartel, led by Russia, have gathered in Austria’s capital to discuss the future of their output-cut agreement, in place since January 2017.
Saudi Arabia and Russia—the world’s largest oil producers—have pushed for an increase in production to be agreed at the OPEC meeting on Friday, and Iran in particular has been a vocal opponent of such plans.
In a surprise move late Thursday, Iran’s oil minister said the was still opposed to a deal to lift oil output, after indicating Wednesday he would accept a modest rise. Bijan Zanganeh said the technical discussions were “not good,” the Financial Times reported.
That could make it tough to get consensus among OPEC members and cause friction with Saudi Arabia, the cartel’s de facto leader by dint of its ability to quickly ramp up production. The uncertainty helped support crude prices Friday.
Representatives of other influential OPEC members told reporters after the late-night technical meeting Thursday that said they backed a plan being pushed by Saudi Energy Minister Khalid al Falih to boost output by one million barrels day, The Wall Street Journal reported.
Many have been expecting production caps in place since the start of 2017 will rise.
“Anything less than a million barrels per day is seen as supportive of prices,” said John Driscoll, chief strategist at Singapore-based JTD Energy. He predicts caps will rise by 600,000, which wouldn’t even offset predicted output declines in Venezuela and Libya.
In other energy products, July gasoline RBN8, +1.27% rose 0.9% to $2.030 a gallon, while August heating oil HON8, +1.74% gained 1.3% to $2.101 a gallon.
July natural gas NGN18, -0.61% gave up 0.3% to $2.967 per million British thermal units. It was trading at $3 just before the data.