At the press conference following the ministerial meeting, the President of Opec, Nigeria’s oil minister Emmanuel Ibe Kachikwu, explained the thinking behind Opec’s decision.
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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.
Many poorer Opec members have said the group’s largest producer was effectively twisting their arms, prompting the Saudi oil minister, Ali al-Naimi, to say he would listen to everyone this time.
Badri tried to lessen the embarrassment of OPEC’s divisions by saying the cartel’s influence on market prices is as strong as ever – an assertion that prompted an outburst of laughter from reporters and analysts in the conference room, Reuters reported. OPEC’s position is that we are glad to see Iran recovering out of sanctions and back to the market place.
The 168th meeting of the Organization of the Petroleum Exporting Countries ended in Vienna, Austria, on Friday, with a resolution by members to keep production outputs unchanged in a bid to ensure long-term stable and balanced oil market for both producers and consumers.
The group will maintain its current production, about 31.5 million barrels a day.
OPEC introduced output ceiling of 30 million bpd in its December 2011 meeting as it scrapped allocating fixed production quotas to member countries.
In the past, OPECwhich pumps about four out of 10 barrels of oil consumed each day around the globehas throttled back on output to support prices.
Cartel members, meeting in Vienna, made no mention of a production target in their final communiqu.
“The only bright spot is the US, where it looks like production will drop”, Michael Corcelli, chief investment officer of hedge fund Alexander Alternative Capital LLC in Miami, said by phone.
“Prices have gone down too much”, said Vice Prime Minister Abdourhman Ataher Al-Ahirish of strife-torn Libya, where GDP is expected to shrink more than 6 percent this year. Saudi Arabia, OPEC’s biggest producer and architect of the current policy, has remained opposed to a production cut unless countries outside the group cooperate.
OPEC expects further cooperation with other influential non-OPEC oil exporters such as Russian Federation and the United States, but added there is no sign to cut global oil output.
That strategy clearly hasn’t worked, with benchmark US crude’s value falling by more than 40 percent over the past year and now hovering around the $40 mark per barrel.
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Saudi Arabia yesterday reiterated its stance that it would be willing to cut as long as non-OPEC also reduces its output. While more countries are able to export oil, it gets in the way of making a path for clean energy. When asked if there would be a meeting before June 2 if prices continue to fall, Kachikwu said: “Yes, potentially yes”. Without curbs elsewhere, this would add to a global glut, as the world is now consuming up to 2 million bpd less than it is producing.
