Opec discusses oil production boost as prices near three-year high

Opec discusses oil production boost as prices near three-year high

Saudi Arabia and Russia are working towards a deal that would cautiously increase the supply of oil in the coming months as prices climb to the highest level in almost three years.

As the Opec+ group of oil ministers meets on Thursday, people familiar with the talks said Opec and its partners outside of the cartel were discussing gradual monthly production increases of several hundred thousand barrels a day between August and December.

But traders and analysts are sceptical the volumes under discussion will be enough to halt a near 50 per cent rally in oil since the start of the year, with demand rebounding sharply from the depths of the pandemic.

Saudi Arabia is looking to raise production only cautiously as persistent uncertainties caused by the coronavirus pandemic and new variants of the virus hang over policymakers.

But people close to the kingdom said its strongest motivation was that it did not want to see prices fall and would actually prefer them to be marginally higher, not just to provide the country with greater revenues but also because it believed more investment in the energy industry was needed.

The level of production increase under consideration is less than the 500,000 barrels a day discussed