US crude inventories fell by three million barrels to 430.6 million barrels up to June 15, according to an American Petroleum Institute report on Tuesday.
But the proposal has run into resistance from Iran, Iraq and Venezuela, who would struggle to immediately raise output and fear losing market share and revenues if other countries open the spigots. USA light crude was 1.05 dollars higher at 66.12 dollars.
After Zanganeh left, Saudi Energy Minister Khalid al-Falih said an overwhelming majority of oil producers agreed with the Russian-Saudi recommendation of jointly and gradually raising output by 1 million barrels a day.
"Essner is betting that the Vienna meeting will yield an agreement to boost production by 500,000 to 800,000 barrels a day, far below the 1.5 million barrel figure floated recently by Russia's oil minister, Alexander Novak".
So, the kingdom may want to compromise and go for a smaller oil production increase, the option that apparently Iran favors, to get an unanimous communique.
Amid strong demand, the market has since tightened significantly, pushing up crude prices and triggering calls by consumers to increase supplies.
Iran is particularly vocal about its objections as it braces for the impact of fresh USA sanctions on its oil exports after President Donald Trump quit the global nuclear agreement. Recent changes in sentiment warn that the current Oil - US Crude price trend may soon reverse higher despite the fact traders remain net-long. In turn, USDCAD rose to a fresh 1 year high as markets reduced rate hike bets from the Bank of Canada with OIS markets now pricing in a 53% chance of a hike in July from 60%.
Riyadh has said it is ready "to mitigate the effects of any supply shortages" from U.S. sanctions on Iran's oil.
Large Crude Oil Draw Lowers Prices
In a welcome move, India and China are working on combining their forces to counter Opec's ability to dictate crude oil prices. Futures rose 0.8 percent to 468.1 yuan a barrel in afternoon trading on the Shanghai International Energy Exchange.
The Bloomberg headline earlier says that OPEC members have come to an agreement on principle for an output increase of 1 million bpd on paper.
"I am sure we will come to consensus, and we will look back at this meeting as being equally important to the one we had in late 2016 when we chose to take that first action we took as 24 countries of restricting supply to bring stability back to the market", he added.
The deal looked to be in line with many analysts' forecasts.
The increase was announced after ministers from the group met on Friday in Vienna.
"Allocating to Saudi Arabia part of the quota of countries that cannot increase output could be a technical solution, but may not be a political one", Al-Falih said.
By Javier Blas After days and nights of diplomatic drama in Vienna, OPEC meets on Friday to decide its oil production policy for the second half of the year.
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.