Everything you need to know ahead of the Opec meeting on Friday

Jessica Morris
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Opec will meet in Vienna on Friday (Source: Getty)

All eyes will be on the organization of petroleum exporting countries (Opec) when it meets in Vienna on Friday to decide whether to increase, decrease or hold its output target from its current level.

Why is it interesting?

A glut in the global supply of oil pushes prices as low as $45 per barrel in mid-January, down from last year's peak of about $116 last June - and prices are currently hovering at around $65 per barrel.

Opec typically controls global oil prices by increasing or decreasing production in response to which direction they're heading in. Or at least that's what they used to ...

What did Opec do last time?

At their last meeting in November Opec countries decided to hold production at around 30m barrels per day. Analysts have since speculated that this is part of a strategy to reduce the profitability of the US shale gas industry - consequently curtailing the growth of it.

And what will it do this time?

A senior Opec delegate told Reuters they expect no change in policy when the organisation meets on Friday, saying that the global oil markets were in good shape, and prices are expected to increase from current levels.

However everyone isn't entirely convinced, and analysts at both Morgan Stanley and Petromatrix have said that they think the cartel could actually lift its production targets.

Are there any other factors to watch?

Opec has previously said it won't cut oil production without co-operation from big producers like Russia. Russia has signaled it has no intention of doing this nevertheless it is sending its energy minister to Vienna.

There could also be talk of Iran's possible return to global oil markets. Analysts have said they expect Iran to ramp up production if it agrees a deal with world powers over its nuclear programme - further weighing on prices.

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