Opec deal will lift oil production rate by 1m

THE Organisation of Petroleum Exporting Countries has agreed to lift the cartel’s oil production rate for the first time since the oil market crash by tentatively making way for a million barrels of oil a day to enter the market over the coming months.

Oil prices bounced more than $2 a barrel higher after ministers agreed to unwind the cartel’s “over-compliance” with the deal, struck in late 2016, rather than a 1.5 million barrel deluge touted by sources close to the ministers ahead of the talks.

It treads a line between opposing factions, confounding fears that schisms would foil an agreement.

The ministers emerged from closed door meetings in Vienna with a compromise that allows those countries capable of ramping up their output room for a modest oil production lift. The nominal million barrel hike unwinds the “over-compliance” with Opec’s 2016 production cap pact, which was 156pc in May this year. This means the actual number of extra barrels allowed will be around a million, but many believe the increases are likely to be lower.

The increase is less than many market participants feared, causing oil prices to bounce back above $75 a barrel from less than $73 a barrel earlier this week, in a relatively benign outcome for countries wary of a price dampening flood of oil.

The production cap pact agreed in late 2016 has helped to lift oil prices from the depths of the downturn at $28 a barrel to more than $70 a barrel.

The deal will also be put to producers outside of the cartel, led by Russia, in meetings today.