- POSTED: 11 Jun 2014 02:04
OPEC, the oil producing cartel, will likely stick by its output ceiling at a meeting here, member nations indicated as they expressed satisfaction with current high crude prices.
VIENNA: OPEC, the oil producing cartel, will likely stick by its output ceiling at a meeting here, member nations indicated on Tuesday as they expressed satisfaction with current high crude prices.
The Organisation of Petroleum Exporting Countries (OPEC), which pumps out about one third of the world's oil, has stood by a daily production ceiling of 30 million barrels for almost three years.
OPEC kingpin Saudi Arabia, the cartel's biggest and most influential producer, declared on Tuesday that he expected no change to oil output levels.
Saudi Oil Minister Ali al-Naimi, speaking on the eve of the meeting, said the market was "stable and balanced" and that he therefore believed there would not be any decision to change output.
"The price is at a comfortable level for producer and consumer countries as well as for the oil industry," Naimi said.
While OPEC appears satisfied with current price levels at around US$100 a barrel, the cartel is in fact pumping below its collective target owing to abundant supplies in top crude consumer the United States.
Offsetting this to a large extent are worries of potential supply strains as Ukraine risks sliding into all-out civil war.
"Current oil prices are positive for... all producers and customers," Libya's acting oil minister, Omar al-Shakmak, told reporters on Tuesday in Vienna, home to OPEC headquarters.
He also joined oil ministers from OPEC members Angola, Ecuador, Iraq, Kuwait and Venezuela in hinting at no change to the ceiling being made at Wednesday's meeting.
"There are indications that there will be a rollover," Iraqi Oil Minister Abdelkarim al-Luaybi said Tuesday.
Luaybi also revealed that Nigeria had nominated its oil minister, Diezani Alison-Madueke, to succeed OPEC's long-standing secretary-general Abdullah El-Badri. A vote was not due until December, while Nigeria has yet to comment on the matter.
Global oil prices have meanwhile held above US$100 a barrel this year, boosted by falling production from Libya, while Iran's output remains hit by Western sanctions over its disputed nuclear programme.
The market has won support also from the Ukraine-Russia crisis.
Investors are concerned that a full-blown conflict in Ukraine would disrupt supplies and send energy prices soaring. Russia accounts for nearly 40 per cent of European Union (EU) gas imports, with half of that transiting through pipelines in Ukraine.
While higher oil prices boost the coffers of producers meanwhile, they can weigh heavily on economic growth, dampening demand and resulting in price weakness further down the line.
Present oil prices are about ten per cent higher than when the cartel last met in December, and remain above the key US$100 level preferred by OPEC kingpin Saudi Arabia.
OPEC comprises crude exporting nations from the Middle East, Africa and Latin America.
"The price... is not bad. It's alright. The market, it's okay," Angolan Oil Minister Jose Maria Botelho de Vasconcelos said on Tuesday.
Kuwait Oil Minister Ali al-Omair declared that he expects OPEC to maintain the status quo so as not to alter prices.
Oil ministers from Iraq and Venezuela had already indicated on Monday that there was a growing consensus for no change.
The International Energy Agency (IEA), which advises countries on energy policy, recently called upon OPEC to raise production sharply to keep oil markets well supplied because of record-high global demand.