OPEC expected to hold oil output at key meeting

Saudi Arabia's Minister of Petroleum and Mineral Ressources, Ali Al-Naimi (2L) arrives arrives for the 163rd meeting of the OPEC conference (Organization of the Petroleum Exporting Countries) in Vienna, on May 31, 2013. (AFP)

 OPEC ministers said they expected to hold oil output levels unchanged despite concern about global demand as they started a crucial meeting in Vienna on Friday.

Questioned about whether the cartel would seek to roll over its daily output target, Angolan Oil Minister Jose Maria Botelho de Vasconcelos said it was likely.

“We are producing about 30 million barrels (per day). I think we will take the decision to maintain the situation,” he told journalists at the start of the meeting in Vienna, where the cartel is headquartered.

He also expressed satisfaction with the current price level, noting: “$100 per barrel is good.”

United Arab Emirates Energy Minister Suhail al-Mazrouei added: “There's nothing controversial (at this meeting), the levels of production being good and adequate to the market and the prices are appropriate.”

Kuwait's OPEC governor Siham Abdulrazzak Razzouqi also said she expected no change, saying: “We think that the market is very stable.”

The 12-member Organization of Petroleum Exporting Countries, which comprises nations from the Middle East, Africa and Latin America and whose biggest producer is kingpin Saudi Arabia, pumps about 35 percent of global oil supplies.

But even ahead of the meeting, there were indications that OPEC would leave its oil output ceiling at 30 mbpd, where it has stood since the end of 2011, in line with market expectations.

In reality, the cartel's actual output runs above this target level.

Even Iran, which in the run-up to the meeting, had pushed for OPEC to lower output, seemed to have joined the consensus.

“I think the current ceiling is logical, rational, reasonable,” he said Friday as OPEC members started their meeting.

“At the closed-door session we will recommend (to member countries) to keep maintaining their production (and) not surplus,” he said.

Iran has been hit by international oil sanctions over its controversial nuclear program which has seen it drop from second to fifth largest OPEC producer in the last two years.

OPEC countries have been generally satisfied with the price of $100 per barrel, although Algeria on Friday appeared flexible on the price.

“We don’t have any price target, we are following the market,” he told journalists.

Ahead of OPEC's ministerial meeting, Brent oil prices stood at $101.60 in morning London trade, down 58 cents from Thursday's closing level.

The gathering comes amidst demand worries linked to the fragile state of the global economic growth, especially in top energy consumer China.

Demand is being contained by weak growth in many advanced economies and by the boom of oil and gas production from shale resources in North America.

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Last Update: Wednesday, 20 May 2020 KSA 09:39 - GMT 06:39
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