The Organization of the Petroleum Exporting Countries (OPEC) concluded its semi-annual meeting Friday in Vienna with a press release congratulating Nigeria’s new minister of state for oil and announcing the election of Qatar’s minister of energy and industry as the group’s leader for the coming year.
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On Friday, OPEC – the 13-member oil cartel – announced that it will look maintain its current rate of production at around 31.5 million barrels per day.
Benchmark Brent oil futures – which are near a six-year low – lost almost $2 on the news, falling 1.5 percent to trade slightly above $43 a barrel by 1455 GMT.
Rather than cut output, like many smaller OPEC members were pushing for, Saudi Arabia once again muscled its way through the meeting, and forcing the oil cartel to maintain output levels.
James Williams at WTRG Economics said the prolonged interval before the next OPEC meeting indicates “they do not seem to think that there will be an agreement this spring”. While that country’s production goes mostly for domestic consumption, that move could also add some to the total amount of OPEC barrels on sale. 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.
Senior oil official Amir Hossein Zamaninia said last week Iran hopes to bring an extra 500,000 barrels on the market by early next year.
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. A stronger U.S. currency weighs on dollar-priced commodities, including oil, by making them more expensive for buyers using foreign currencies. It said that member countries were committed to the goal of full, effective and sustained implementation of the United Nations framework convention on climate change.
Venezuela’s oil minister said he would table a proposal for the group to reduce output by 1.5m barrels a day to try to bolster the price.
The group of 12 OPEC countries account for about 40 percent of the world’s crude production.
Saudi Arabia’s Minister of Petroleum and Mineral Resources Ali Ibrahim Naimi arrives for a meeting of the Organization of the Petroleum Exporting Countries, OPEC, at their headquarters in Vienna, Austria, Friday, Dec. 4, 2015. “The burden to adjust supply remains on non-OPEC producers”.
On the New York Mercantile Exchange, January West Texas Intermediate crude dropped $1.11, or 2.7%, to finish at $39.97 a barrel, after touching a $39.60 low. “We just feel comfortable to wait and watch around this time”, Emmanuel Ibe Kachikwu, Nigerian petroleum minister and OPEC conference president, said Friday.
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“Saudi Arabia says it wants to preserve the long-term interest of OPEC producers”, Mr. Zanganeh said.
