The agreement to keep output near record highs was largely expected, but wiped out any remaining hope for bulls that production cuts could push prices higher, sending ripples across wider markets.
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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.
“Given the present position of the economy of countries that are purchasing (oil) and the worldwide economy, we will retain production at current levels”, said Kachikwu.
If the cartel kept producing at current levels of about 31.5 million barrels a day, demand would lag supplies in 2016 by 700,000 barrels a day, keeping prices low, said the document from OPEC’s Economic Commission Board.
Iranian Oil Minister Bijan Namdar Zanganeh asked the OPEC to reduce production by at least 1.3 million barrels per day (mbpd) on December 1. The group has pumped more than its collective target of 30 million barrels a day the past 18 months, data compiled by Bloomberg show.
Indonesia, which rejoined Opec after leaving seven years ago, said it would increase crude production. The news sent the price of US crude to less than $40 a barrel for the first time since late August.
The cartel added that it will continue to produce at its actual level, instead of the official quota of 30 million barrels per day.
US crude was trading up 21 cents at $41.29 per barrel at 0022 GMT, after settling up almost 3 percent on Thursday.
The sources said there was little chance of Saudi Arabia making a formal proposal for OPEC output cuts, contingent on co-operation from non-OPEC, as reported by Energy Intelligence.
“While oil advanced (Friday)… there is really nothing much to cheer about”, said Bernard Aw, market strategist at IG Markets in Singapore.
“The heavy pressure on non-OPEC producers, especially USA shale, is going to be kept up”, said Paul Horsnell, head of commodities research at Standard Chartered.
While the price weakness has led to thousands of industry job losses, with major firms also scaling back future investment, it has proved good news for consumers and businesses – with falling fuel and other energy costs boosting spending power.
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That seems to leave only an increase of Middle East turmoil as a potential price driver, for now. OPEC said in its recent monthly status report its members produced an average of 31.4 million barrels per day, down from 31.6 million in September.
