OPEC set to maintain oil output levels
OPEC appeared unlikely to cut oil production to lift languishing prices at a meeting in Vienna on Friday, potentially worsening one of the worst crude gluts in history.
Despite oil prices plunging by more than 60% in 18 months, OPEC kingpin Saudi Arabia and the cartel’s other Gulf state members are defying calls to cut output.
This is a year-long strategy of attempting to preserve market share and fend off competition from non-OPEC and world leading producers Russia and the US.
Saudi Arabia on Friday repeated the kingdom’s stance that it would be willing to cut as long as non-OPEC also reduces its output.
“We have said on more than one occasion that we are willing to cooperate with anyone that will help balance the market…with us,” Saudi oil minister Ali al-Naimi told at OPEC headquarters in Vienna.
Markets expect the Organisation of the Petroleum Exporting Countries – which pumps out about one-third of the world’s oil – to leave its daily oil output ceiling at 30 million barrels.
Iran yesterday 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.
This is despite slowing growth in global oil demand, largely because of weaker economic output in China, the world’s biggest consumer of energy.
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.
Its return is seen as a way for the resource-rich country to access cheaper oil supplies as local demand soars while domestic production falls.
Meanwhile, oil prices rose in Asian trade toay Friday as traders hedged their bets ahead of that OPEC meeting.
OPEC is a permanent intergovernmental organization of 12 oil-exporting developing nations that coordinates and unifies the petroleum policies of its Member Countries.
