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Doubts about OPEC's production cut agreement make crude oil prices dive

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"OPEC needs to wake up instead of playing a game of who will cry first", said former Qatari energy minister and OPEC president Abdullah al-Attiyah.

The Organisation of Petroleum Exporting Countries will meet on Wednesday in Vienna to try finalise the terms of its first production decrease in eight years.

"The fact that geopolitical rivals, Saudi Arabia and Iran, appear to have problems resolving their differences on the allocation of any cartel-wide production cuts seems to be the major stumbling block to any agreement", said Barnabas Gan, an economist at OCBC bank in Singapore.

Al-Abadi said he understands that OPEC members will agree to reduce production by between 900,000 and 1.2 million barrels per day - that would be a cut of between 2.7 percent and 3.6 percent from October levels.

Friday's news that Saudi Arabia wouldn't be sending a delegation to a technical Opec meeting on quotas had reignited fears that a deal could not be reached, said Michael Hewson, chief market analyst at CMC Markets UK.

Libya is now producing about 600,000 barrels per day (bpd) and aims to double output in 2017, as it targets the level of 1.6 million bpd of before its 2011 revolution.

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On Thursday, the oil minister of a non-OPEC nation, Azerbaijan, said OPEC was also pushing oil producers outside the group to make big cuts in output. "If we reach an agreement, I am optimistic that prices will rise and the global economy requires such conditions". That would probably trigger a crash in oil prices to below $40 a barrel, according to analysts such as Thomas Pugh of Capital Economics.

With a high degree of uncertainty going into the last 24 hours before the meeting, oil price volatility is expected to be high.

Beyond the planned output cut, Morgan Stanley said that the firm USA -dollar .DXY was the strongest oil price driver.

Meanwhile, the Algerian and Venezuelan oil ministers were travelling to Moscow overnight in a final attempt to persuade Russian Federation to take part in cuts instead of merely freezing output, which has reached new highs in the past year. Tehran has long argued it wants to raise production to regain market share lost under Western sanctions, when its political arch-rival Saudi Arabia increased output. "It could still imply an OPEC production level considerably in excess of 33 million bpd, depending on developments in Libya and Nigeria and the speed and rigor of compliance", David Hufton, managing director of brokerage PVM Oil Associates Ltd. said in a note.

The source said the peso's depreciation against the dollar was also affecting oil prices.

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