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| Oil surges as Opec tries to reach production cut deal | Oil surges as Opec tries to reach production cut deal |
| (about 2 hours later) | |
| The price of oil has surged as an Opec meeting tries to hammer out a production cut agreed in September. | The price of oil has surged as an Opec meeting tries to hammer out a production cut agreed in September. |
| Prices rose nearly 8% as energy ministers attended Wednesday's Opec meeting in Vienna. | |
| Saudi energy minister Khalid Al-Falih said "there are good chances" a formal deal can be struck. | Saudi energy minister Khalid Al-Falih said "there are good chances" a formal deal can be struck. |
| In September oil ministers had said full details of the agreement would be finalised at the meeting. | In September oil ministers had said full details of the agreement would be finalised at the meeting. |
| Opec pledged to limit production by about 700,000 barrels a day, but said Iran would be allowed to increase production. | Opec pledged to limit production by about 700,000 barrels a day, but said Iran would be allowed to increase production. |
| Oil prices rose then, but the absence of detail prompted some traders to have second thoughts about whether the cartel would actually take firm action. | Oil prices rose then, but the absence of detail prompted some traders to have second thoughts about whether the cartel would actually take firm action. |
| Seeking consensus | Seeking consensus |
| Ahead of Wednesday's meeting, Mr Al-Falih said "there are good chances" that a detailed deal can be brokered, and that "the spirit is good". | Ahead of Wednesday's meeting, Mr Al-Falih said "there are good chances" that a detailed deal can be brokered, and that "the spirit is good". |
| He said Saudi Arabia would have to "take a big cut and a big hit" to current production - and its 2017 forecast - if Opec production were limited to 32.5 million barrels per day. | He said Saudi Arabia would have to "take a big cut and a big hit" to current production - and its 2017 forecast - if Opec production were limited to 32.5 million barrels per day. |
| "So we will not do it unless we make sure that there is consensus," he added. | "So we will not do it unless we make sure that there is consensus," he added. |
| A production freeze for Iran at pre-sanctions levels would be "very considerate of other Opec members when they're having to cut," he said. | A production freeze for Iran at pre-sanctions levels would be "very considerate of other Opec members when they're having to cut," he said. |
| "Iran has recovered to its pre-sanctions levels," Mr Al-Falih said. | "Iran has recovered to its pre-sanctions levels," Mr Al-Falih said. |
| Saudi Arabia has also been discussing a production cut with Russia, he added. | Saudi Arabia has also been discussing a production cut with Russia, he added. |
| Brent crude rose 7.8% to $50.99 per barrel, while US crude also rose 7.6% to $48.66. | |
| However, Bjarne Schieldrop, an analyst at SEB, said there is no chance of a production cut. | However, Bjarne Schieldrop, an analyst at SEB, said there is no chance of a production cut. |
| He said: "There is no chance that they are going to solve Iran and Iraq issues at a 14-man meeting after not being able to solve it ahead of the meeting further to discussing it for six months... | He said: "There is no chance that they are going to solve Iran and Iraq issues at a 14-man meeting after not being able to solve it ahead of the meeting further to discussing it for six months... |
| "The market is behaving as if there is lots of uncertainty about the outcome. There is hardly any uncertainty at all." | "The market is behaving as if there is lots of uncertainty about the outcome. There is hardly any uncertainty at all." |
| A decision to cut has been hindered by a rivalry between Saudi Arabia, Opec's top producer, and Iran. | A decision to cut has been hindered by a rivalry between Saudi Arabia, Opec's top producer, and Iran. |
| The Saudis have been hesitant to shoulder the lion's share of a cut, while Iran has resisted reducing its own production, arguing it has yet to recover its output levels after years of sanctions. | The Saudis have been hesitant to shoulder the lion's share of a cut, while Iran has resisted reducing its own production, arguing it has yet to recover its output levels after years of sanctions. |