“This decision reflects the consensus going into the meeting of Opec’s policy for prices needing to find a floor to deter new non-Opec supply projects”, Gareth Lewis-Davies, London-based energy strategist at BNP Paribas, said by phone.
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Arriving for Friday’s meeting, Iranian oil minister Bijan Namdar Zanganeh said Iran is ready to discuss a ceiling for its production – but only after his country makes a “full return to the market”.
OPEC on Friday confirmed that Indonesia had returned to the cartel after a near seven-year absence, bringing the number of member countries to 13.
OPEC rears its stubborn head once again.
An attempt to nudge the cost of oil higher would have involved lowering output.
The world is dependent on oil, OPEC’s members own most of what’s left of it and together they account for one third of oil production.
Of course, as many predicted, OPEC has failed to set any new production limits at this important meeting.
North Sea oil first flowed ashore exactly fifty years ago, today it’s one of the most expensive places in the world to operate. Instead, OPEC leaders demurred at the semiannual meeting, opting to wait at least six months to update its production quota when it meets next in June. However, these rumors were quickly rejected by other official sources.
“And $40 a barrel is not good, even for the Saudis”, the analyst added.
”We have said on more than one occasion, we are willing to cooperate with anyone who can balance the market”, said Saudi Arabian oil minister Ali al-Naimi. He also added that there is “absolutely no disagreement” on strategy within the group’s members. “Others should do the same”, the Iraqi minister further said, referring to non-OPEC countries such as US.
The crash in oil prices has OPEC so divided that the only thing the cartel can agree on is not to agree at all.
The non-OPEC group of countries taken as a whole are expected to see their production fall by 600,000 bpd in 2016 and in combination with an increase of 1.2m bpd for global oil demand this will provide scope for Opec to increase production in combination with a fall in the bulging stocks of oil.
OPEC, whose members face pressure from cleaner fuel technologies, also had a word for the Paris climate summit. He made no comment after the meeting. “Every country should know how much oil it should produce”. The group pumped about 31.4mn in October, according to estimates in its monthly market report.
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According to a statement by the General Manager, Communication of NNPC, Mr. Ohi Alegbe, the minister noted that a balanced and stable market would be of crucial importance in the years ahead to ensure continued investment in the industry as it gears up to meet the world’s burgeoning energy needs. Jamie Webster, Senior Director of Oil Market for IHS, said, “It’s clear at this point that the group’s official target is totally irrelevant”. “We are really anxious”. When asked if he is content with the state of the market, Naimi offered an existential response, “Is anybody content?”
