Oil prices have increased more than 1% as OPEC is struggling to reach an agreement over production policy at its biannual meeting in Vienna, Austria.
Brent crude LCOc1, the global benchmark for oil prices, soared 75 cents a barrel, trading at $73.80, while US light crude CLc1 rose 60 cents to reach $66.14, according to Reuters.
After around 18 months of output cuts in order to tighten the market, OPEC was widely expected to announce a decision to ease the voluntary supply cuts at the Vienna meeting.
Saudi Arabia, the de-facto OPEC leader, and Russia are inclined to push through a deal to raise output, while Iran and other exports are not supporting any plans to ease supply constraints.
The producer group is anticipated to announce an increase in production of 500,000 to 600,000 barrels per day (bpd) to ease tightness in the oil market.
Dutch bank ING commodities strategist Warren Patterson was quoted by the news agency as saying: “Any deviation from this figure is likely to generate a market response.
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“A more relaxed policy will push Brent towards $70 a barrel, while restrictive measures will support crude oil back towards $80.”
Brent prices, which slumped in 2016, witnessed a huge jump last month, exceeding the $80 a barrel mark as a result of strong demand and tightness in oil market.
Traders were worried about supply shortage due to a dip in production in Venezuela and Libya, as well as US sanctions on Iran.
Another major factor looming over the market is the spiralling trade war between the US and other nations, including China and India.
China indicated it could impose a 25% duty on US crude oil imports after Washington announced its decision to levy tariffs on Chinese imports.