On Friday, OPEC said it would keep its production level unchanged, basically legitimizing the 1.5 million barrels a day it has been producing over its output ceiling of 30 million barrels a day. “The Saudis aren’t going to make any cuts unless they get cooperation both within and outside of Opec”.
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USA crude futures CLc1 fell $1.11, or almost 2 percent, to settle at $39.97.
“Dialogue and collaboration with consumers, non-OPEC producers, oil companies and investors are essential in reaching our common goal of a more orderly oil market”, Mr. Kachikwu said.
A glut of crude may keep oil prices low for the next 15 years, according to Goldman Sachs Group Inc.
Early reports out of OPEC’s Friday meeting indicate that leader Saudi Arabia seems to be holding fast to its plan of business as usual in the hopes that higher-cost producers around the world, including many us shale producers, will eventually succumb to the low-price environment, leaving OPEC members with a larger share of the market.
Iraq is also resurgent.
“We will have to accommodate Iran one way or the other”.
Iran won’t accept any production curbs until it restores about 1 million barrels a day of output after the removal of global sanctions next year over its nuclear program, he said. Opec abandoned production quotas for individual members several years ago and most members have been producing as much as they want.
Bullish wagers on U.S. crude oil from hedge funds and other big speculators fell to the lowest level in more than five years, data from the U.S. Commodity Futures Trading Commission (CFTC) showed.
OPEC, whose 12 member nations come from the Middle East, Africa and Latin America, pumps out about one third of the world’s oil.
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. We believe, however, that there are high risks that this may prove too slow an adjustment as inventories continue to accumulate and storage utilization nears high levels in the face of a mild winter, slowing EM growth and a potential lift of global Iranian sanctions. A cut in daily output would have eased pressure on oil prices, which are near historic lows.
However, a fresh election was made on Friday at the 168th ordinary meeting of the organisation in Vienna, Austria, Kachikwu’s first meeting at the helm.
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OPEC’s previous production target of 30 mbd is outdated, but with Indonesia returning as a member and Iran expected to increase exports next year, the cartel could not agree on a new figure. “I think there will be a decision about how to act on the market in the second quarter of 2016”. It was not immediately clear what happened behind closed doors.
