What you should know about the Opec meeting

Saudi Energy Minister Khalid Al-Falih said Thursday that OPEC members and other countries who agreed in November 2016 to cut output should increase supply by about one million barrels per day to prevent a shortage.

The Organisation of the Petroleum Exporting Countries (Opec) consists of 14 oil exporting nations aiming to control the supply and price of global oil.

The production increase will partly undo a 1.2 million barrel cut OPEC agreed on in late 2016 that has helped push up the price of oil.

Global marker, Brent, traded above $100 a barrel for several years until 2014, dropping to nearly $26 in 2016 and then recovering to over $80 last month.

Iraqi Oil Minister Jabar al-Luaibi said on Wednesday he hoped there would be agreement when OPEC meets but added: "The oil market has not reached the level of stabilization".

Iran, facing U.S. sanctions on its oil industry and angry that U.S. President Donald Trump has asked OPEC to pump more oil, has said the producer group must include a sanctions debate in the agenda of Friday's meeting.

An increase in Opec production will be particularly helpful for the VLCC market, which is on track for the worst year in history due to severe vessel over-supply, according to Amit Mehrotra of Deutsche Bank.

Since a year ago, OPEC and its allies have been participating in a deal to cut output by 1.8 million bpd.

The president of the United States doesn't have any problem with increased oil prices since this leads to raising Shale productions, said the minister, adding, "however in public, he shows opposition and blames the OPEC while these conditions are not created by OPEC but by the U.S. administration".

Prices are likely to remain volatile even after OPEC's decision because the trade conflict between the USA and China could escalate.

Opec sources said the final compromise also depended on whether Opec agreed to mention United States sanctions in the group's communique, an important point for Iran, which has blamed USA measures against Tehran for the recent rise in oil prices.

For about three weeks ahead of the meeting, prices had retreated from 3-1/2-year highs on fears that larger production increases could lead to oversupply.

Phillip Futures is predicting "an approximate 300,000-600,000 barrels per day (bpd) hike by Saudi Arabia and Russian Federation collectively". When it's too low, oil companies cut back operations and lay off thousands of workers.

Some traders expect USA barrels to get trapped if the dispute between the world's two biggest economies turns into a fully blown trade war, which in turn would force own the price of US crude even further.

Mr Zanganeh has said the president is to blame for high prices because of his unilateral withdrawal from the worldwide nuclear agreement and the imposition of fresh sanctions that could significantly curb Iran's crude exports.

Energy ministers are gathering in Austria to determine the future of global oil output.

"I think it would create a carousel affect where China then buys more alternate grades and other importers buy more USA grades", a trader with a global merchant said.

Today's OPEC meeting is also highly important for the market watchers amid the growing trade tension between the USA and China, where both the countries have warned imposing import tariffs on each one's crude products.

OPEC's deal to release more supply centres on returning to 100 percent compliance with existing, agreed cuts.