11 June 2014, Vienna, Austria – OPEC has reached a “consensus” to maintain its oil output ceiling, Venezuela’s energy minister said Wednesday, as the cartel’s members met to formally agree the no-change decision.
The Organization of Petroleum Exporting Countries (OPEC), which accounts for one third of the world’s oil, has held its production ceiling at 30 million barrels per day (bpd) for almost three years.
With crude prices at near $110 per barrel, Venezuela’s Rafael Ramirez said: “”The prices are good, the market is stable.”
“There is consensus to maintain (the) production” ceiling, he told reporters just before Wednesday’s meeting began.
OPEC Secretary-General Abdullah El-Badri added: “I think there will be another rollover. We will discuss it at the meeting.”
The cartel is in fact pumping below its target owing to ongoing shortfalls in Libya — which been rocked by persistent unrest — and abundant supplies in top crude consumer the United States.
In the run-up to Wednesday’s gathering, more than half of OPEC’s dozen member nations indicated that there would likely be a rollover of the collective output target.
– OPEC satisfied with prices –
Members remain pleased with current oil price levels, which have jumped by around 10 percent since December on supply strains arising from Iran, Libya and Ukraine.
OPEC kingpin Saudi Arabia expressed satisfaction at the state of the oil market.
“Everything is in good order, supply in good, demand is good, price is good,” Saudi Oil Minister Ali al-Naimi added before Wednesday’s talks.
Naimi had already indicated no change on Tuesday, stressing that the market was stable and balanced.
Fellow OPEC members Angola, Ecuador, Iraq, Kuwait, Libya and Venezuela have also hinted at no change being made, indicating a growing consensus.
Global oil prices have held above $100 a barrel this year, boosted partly by the Ukraine crisis, which has stoked worries of a brutal civil war that could disrupt energy supplies and send the market surging.
Iran’s output meanwhile remains plagued by Western sanctions over its disputed nuclear programme.
Analysts add that output disruptions in Libya mean there is no pressure on other OPEC members to curb production.
The North African’s production stands at less than 200,000 barrels per day, which is far less than its full capacity of 1.5 million.
In order to alleviate this, Iran and Iraq are pumping out additional oil.
“The loose 30mbpd target … will continue to offer Saudi Arabia and its Gulf partners some room to manoeuvre and flexibility should Libyan supplies continue to disappoint,” said VTB Capital analyst Andrey Kryuchenkov.
He added: “Prices remain well in excess of $100 per barrel, which should suit most member states.”
– Nigeria targets top job –
In a separate development, Iraqi Oil Minister Abdelkarim al-Luaybi revealed that Nigeria had nominated its oil minister, Diezani Alison-Madueke, to succeed El-Badri as secretary-general. A vote was not due until December, while Nigeria has yet to comment.
The International Energy Agency, which advises countries on energy policy, recently called upon OPEC to raise production sharply to keep oil markets well supplied ahead of an expected rise in demand in the second half of this year.
OPEC members will meanwhile be mindful also of ongoing international efforts to clinch a deal between world powers and Iran over Tehran’s disputed nuclear programme.
Iran’s oil output could reach 4.0 million barrels per day in “less than three months” if Western sanctions are lifted over its nuclear energy plans, Oil Minister Bijan Zanganeh said Tuesday.
The Vienna-based cartel comprises 12 crude exporting nations from the Middle East, Africa and Latin America.