OPEC nations decided Friday to keep producing oil at their current high levels, effectively acknowledging their inability to push up crude prices.
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Saudi Arabia has pushed OPEC down a painful approach: aggressively pump oil to keep prices low and crowd out high-cost producers.
The ministers of the Organization of the Petroleum Exporting Countries appeared to have little choice.
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.
Naimi earlier had said he hoped growing global demand could absorb an expected jump in Iranian production next year: “Everyone is welcome to go into the market”. Rather, the USA oil industry is more or less under the mercy of the Organization of the Petroleum Exporting Countries (OPEC).
In view of this, and emphasizing its commitment in ensuring a long-term stable and balanced oil market for both producers and consumers, the Conference agreed that member countries should continue to closely monitor developments in the coming months.
Global oil stockpiles have risen to record levels as Saudi Arabia, Russia and Iraq boosted supply, the International Energy Agency said on November 13.
Beijing will add 70-90 million barrels of crude to storage tanks in 2016 to build up its strategic petroleum reserves (SPR), according to most respondents in a poll of five analysts and data collected by Reuters analysts.
Kachikwu who is also head of Nigeria’s delegation to the 168th Ordinary OPEC Meeting made this assertion while addressing the OPEC Ministers Conference in Vienna, Austria.
U.S. benchmark West Texas Intermediate tumbled US$1.11, or 2.7 per cent, to US$39.97 a barrel on the New York Mercantile Exchange.
“At the end of the day, every country has a sovereign right to bring its resources to the market place”.
Mr Andlauer said that Iraq, Mexico and Russian Federation could increase production to offset the decrease in shale from North America, as only a couple of shale players can remain profitable with oil prices hovering at $40 per barrel. “We are only 35 percent of the producers an there are still 65 … percent producers out there”.
The next ordinary meeting of OPEC is set for June 2, 2016.
The razor-thin chance OPEC will curtail its crude production to quash the oil-market slump hinges on an improbable alliance between the group’s top exporter, Saudi Arabia, and one of the kingdom’s geopolitical rivals, Russia.
The Saudis already resisted cutbacks a year ago, a strategy calculated to put higher-cost outside competitors – like USA shale oil producers – out of business. Venezuela has warned of a “catastrophe” if OPEC doesn’t cut output, saying prices could tumble to $30 a barrel.
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OPEC’s secretary general Abdullah al-Badri said the cartel could not even agree on making routine projections for oil output next year because it could not predict how much oil Iran will add to the market as sanctions are withdrawn under a nuclear deal reached with world powers in July.
