Iran’s Minister of Petroleum Bijan Namdar Zangeneh speaks to journalists prior to the start of a meeting of the Organization of the Petroleum Exporting Countries, OPEC, at their headquarters in Vienna, Austria, Friday, Dec. 4, 2015.
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“So we chose to postpone the decision until the next Opec meeting, when the picture will be clearer”.
Market analysts expect oil prices to fluctuate in the coming months. “Others should do the same”, the Iraqi minister further said, referring to non-OPEC countries such as US.
The Opec is committed to production of about 31.5mn barrels a day, Nigeria’s Minister of State for Petroleum Resources and Opec president Emmanuel Ibe Kachikwu said after the meeting.
“Now the Viennese OPEC family gathering is over, the music has stopped and they re sweeping up, but nothing has changed – the oil production remains unchanged, the oil production quota remains divorced from real-world oil production, and the slightly dysfunctional OPEC family – like most families – has gone its separate ways”, said Christopher Wheaton, energy fund manager and analyst at Allianz Global Investors.
The increase from a previous target of 30 million barrels doesn’t include production from Indonesia, which joined the group after a break of nearly seven years, according to a delegate with knowledge of the matter, who asked not to be identified because the decision hasn’t been made public. A cut in daily output would have eased pressure on oil prices, which are near historic lows.
Friday’s announcement sent ripples through wider markets, but losses in oil futures were limited as prices hit key support levels around $40 a barrel.
A recent surge in US production of shale oil has provided more competition for OPEC producers.
Non-Opec supply is expected to decrease next year, while global demand is anticipated to expand by 1.3 million barrels per day, according to Opec. But Saudi Arabia has been content to keep production up, which has squeezed profits for producers in non-OPEC countries, including the United States.
OPEC held a policy meeting in Vienna on Friday.
Falling crude prices helped spur a rout in oil-industry stocks, which were the worst performers on the Standard & Poor’s 500 Index this year.
Brent crude oil futures fell 60 cents to $43.24 a barrel by 10:54 am EDT (15:54 GMT), after rising in early trade.
How much oil Iran can put back into global supply is up for debate. Oil companies have slashed tens of thousands of jobs and delayed or canceled $200 billion in projects, while USA consumers have enjoyed the lowest gasoline prices since 2008. Prices fell 4.2 per cent on the week. And if a Saudi-led production cut occurred without non-OPEC- member countries reducing their production, even many OPEC countries believe it might not give prices a lasting lift, meaning Saudi would gain nothing even while creating an opening for Iran to boost sales. If Iran is given permission to resume exports it is unclear how soon, at what pace and with how many barrels Iran can offer oil for sale.
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“The OPEC member countries have lost so much money”, Zanganeh said Thursday in the Austrian capital.
