Falling production in Venezuela and Libya, as well as the risk of lower output from Iran as a result of U.S. sanctions, have all increased market worries of a supply shortage. US light crude was 1.05 dollars higher at 66.12 dollars.
The market is now under "OPEC-Watch" with numerous major players on the sidelines until the cartel along with Russian Federation makes its decision about production rates at its meeting in Vienna on June 22-23.
Fawibe said: "If OPEC increases its production by 1.5million barrels per day, there will be a slump in the price, especially now that we are going to winter."He urged the federal government to proactively address the situation in the oil-producing region to enable the country to boost production, which stood around 2.25 million b/d earlier this year".
Analysts expect OPEC to announce an increase in production of 500,000 to 600,000 barrels per day (bpd), which would help ease tightness in the oil market but would not be enough to create a glut.
"The effective increase in output can easily be absorbed by the market", Harry Tchilinguirian, head of oil strategy at French bank BNP Paribas told Reuters Global Oil Forum. Brent crude, the global oil benchmark, was down 1.6% on the day, at $73.54 a barrel, on London's Intercontinental Exchange.
If Iran continues to oppose a deal when ministers formally gather on Friday and musters the support of others - perhaps Venezuela, Iraq and Algeria - OPEC may be unable even to issue a communique, let alone decide to increase production.
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In a night of drama in Vienna, the Joint Ministerial Monitoring Committee, which recommends policy to the group, reached an agreement despite Bijan Zanganeh, the Iranian oil minister, walking out of the meeting and predicting Opec won't reach a final deal when it meets formally on Friday.
Falih said the oil market had now rebalanced and his aim was to prevent a shortage of crude in future that could squeeze the market.
OPEC and its allies have since previous year been participating in a pact to cut output by 1.8 million bpd.
Oil prices surged almost 75 percent, touching $80 a barrel, after OPEC and allies agreed to cut production in late 2016.
"If the volume of spare capacity goes down then the market gets much more vulnerable to supply shocks", said Essner, the Nasdaq analyst.
Falih also said the real increase for OPEC and non-OPEC would be smaller than the nominal gain of 1 million bpd.
OPEC takes its decisions by unanimity, so if Iran were to wield its veto Saudi Arabia would be left only with the option of assembling a coalition of willing countries to bypass Tehran's opposition.