Asali noted that out of global production of 80 million bpd of crude oil, 31 million bpd are produced by OPEC members, which means the OPEC output accounts for more than one-third of the commodity in the world.
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And Iran on Thursday said it would not bow to pressure whereby it avoids increasing its production following the lifting of sanctions that had been imposed due to its disputed nuclear programme.
OPEC will likely decide to roll over oil production at its meeting on Friday, with Saudi Arabia telling other members it has no intention of floating a proposal for curbing output. The move helped to send Brent crude, the global benchmark, down to $42 a barrel from near $100. OPEC’s Economic Commission Board last week warned that the current oversupply of oil was so great that it would “cap the upside in oil prices” through much of 2016 even if production was cut, according to a document viewed by the Journal.
“The overproduction we have from OPEC is going to produce a catastrophe in the price”, Mr. Del Pino told reporters ahead of the OPEC meeting.
Today’s meeting at OPEC headquarters will meanwhile see it approve Indonesia’s return to the organisation following a six-year absence that had been triggered by southeast Asia’s largest economy becoming a net importer of oil. “Nothing has been curtailed”.
“I think 2016 will be very important, in terms of both the dynamics of [Iran’s] comeback, the dynamics of reduction in production and reduction in investment and contraction of the market as it were we will begin to see [prices] trending upwards”, Kachikwu said.
Iran will raise production by up to 1 million barrels per day following years of forced curbs because of the sanctions over its atomic program, he added.
“We need to reach an average of 30 million barrels a day; with this we will have a market reaction”, Pareja said.
But most analysts expect OPEC ministers to leave Vienna on Friday without a change in its policy, as Persian Gulf Arab members indicated before the gathering that they didn’t want to change course. This time, the continued decline in prices has prompted less-wealthy states to clamor for change, with officials from Venezuela meeting with Ecuador, Algeria, Iraq and Iran on Thursday to rally support for cuts.
Iran has repeatedly said OPEC should reduce production to make room for its return to the market. The Paris-based IEA was established four decades ago to provide a counterweight to OPEC following the Arab oil embargo, and traditionally maintains a laissez faire policy toward markets.
Saudi Arabia has long insisted it would cut production only if fellow OPEC members and non-OPEC countries joined in.
OPEC pumped 32.1 million barrels a day in November, exceeding its 30 million-barrel target for an 18th month, according to a Bloomberg survey of companies and analysts. He said he expected OPEC to maintain production policies on Friday.
Indonesia, which left OPEC in 2008, has returned to the group.
Brent North Sea crude for January was trading 53 cents higher at 44.37. OPEC projected that demand would grow despite continuing low prices, in its monthly report released last month.
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Oil prices rose Thursday as traders hedged their bets in case OPEC surprises the market.
