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The move effectively scraps its strategy of squeezing US competition through high supply that had backfired by lowering prices and draining the cartel's own economies.

Documents prepared for Wednesday's meeting propose the group cut production by 1.2 million bpd from October levels, an OPEC source familiar with the papers said.

A decision to cut production could have a lasting impact on consumers, as oil price increases feed into the cost of vehicle fuel, heating and electricity.

Brent crude futures for delivery in January were up $4 a barrel, or 8.5%, at $51.32 a barrel by 0915 ET, recovering from a drop of almost 4% on Tuesday and on course for their biggest one-day move in nine months. "We've seen in the last few months a counter cyclical decline in United States inventories and we believe that 2017 will see another high year of demand". "If exports from the Middle East truly tick lower, we are likely to see the Brent Dubai spread narrow as a result of slightly less Dubai-linked crudes (from Opec), and status quo to higher Brent-linked crudes". The meeting on November 30 was expected to rubber-stamp that deal, with Russian Federation and some other non-OPEC producers such as Azerbaijan and Kazakhstan also contributing.

The agreement is also likely to call for a reduction of about 600,000 barrels a day from non-OPEC countries. It can also lay claim once again to playing a part in influencing world prices.

But investors should note that if OPEC manages to cut a deal and boost oil prices, US shale oil production will likely gain traction.

The Saudi stance raises chances not only of yet another inconclusive meeting. "A better economy, a better labor market - those matter much more", Niemira said.

OPEC in September laid out the contours of a cutback the ministers needed to sign off on Wednesday. Hedge funds and other money managers have stepped up their short bets on crude oil ahead of the OPEC meeting, covering against a steep downfall in prices should OPEC fail to come to terms.

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Kuwait, Venezuela and Algeria have agreed to monitor compliance with the OPEC agreement.

In the current scenario, a $1 rise in oil price would push up Iraq's revenues by $1 billion a year.

Oil and gas company executives have found some solace in sharpening their pencils and keeping their companies' noses to the grindstone, lowering expenses and pushing the limits of technology to yield higher and higher efficiencies and cost savings in the drilling and completion process, particularly in the shale beds of North America.

"The losers are Europe and Japan - oil-importing regions of the world", Guatieri said.

A compromise appeared to be in the works earlier Wednesday, when Saudi Arabia hinted that it would allow Iran to be exempt from the cut.

The Saudis have always been hesitant to shoulder the lion's share of a cut, while Iran has resisted reducing its own production. They could be made partially whole if neutral zone output returns.

A combined output reduction of 1.8 million bpd by OPEC and non-OPEC represents nearly 2% of global output and would help the market clear a stocks overhang, which had sent prices crashing to around $US28 a barrel earlier this year, from levels as high as $US115 a barrel seen in mid-2014. Indonesia's quota (722,000 barrels) will be redistributed among other members of the organization.

The Energy Department predicts that US production will fall from 9.4 million barrels a day in 2015 to 8.8 million this year and 8.7 million next year - the forecast assumed oil at $50 a barrel next year.