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When Opec meets in Vienna on 25 May the group will be facing tougher challenges than it had hoped for in the aftermath of the previous gathering on 30 November. The six-month output curb it agreed on then hasn’t done the trick: inventories, though falling, remain stubbornly high. Despite strong compliance, pressure is mounting for Opec to take firmer action.
But that’s easier said than done. Internal tensions within the grouping – and the 11 non-Opec countries cutting in parallel – will grow, the longer curbs remain in place, especially as it interferes with members’ plans to boost output.
Iraq and Iran may have the most eye-catching plans to increase production, but Kuwait and the UAE are also looking to kick on. Meanwhile the temptation for smaller producers to boost their revenues through cheating will rise in the coming months.
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