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OPEC keeps 30m-barrel daily output
Source: Agencies |
December 15, 2011, Thursday
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OPEC yesterday agreed to keep crude output at a daily 30 million barrels but left it up to its 12 members to voluntarily honor that ceiling without overshooting it.
Ahead of yesterday's talks, Iran had sought lower production for the cartel, which would raise prices. But it apparently bowed to Saudi Arabia, which wanted to maintain levels and which effectively sets OPEC policy as its largest producer.
Despite the compromise, Saudi-Iranian tensions overshadowed much of the meeting.
The OPEC statement said the target includes Libya, which is increasing production after its civil war ended. Libyan delegates said the country is pumping about 1 million barrels a day and plans to be up to pre-civil war levels of around 1.6 million barrels a day within six months.
The statement from the Organization of the Petroleum Exporting Countries said members have agreed to voluntarily lower production "to ensure market balance and reasonable prices," should future world supply exceed demand.
But by leaving it up to members to cut back on output if needed, the organization effectively acknowledged that it has given up efforts to act as a unified regulator of the oil market. The 30 million figure already represents overproduction of 11 percent from targets agreed to three years ago, the last time OPEC set output quotas on individual nations.
OPEC Secretary General Abdullah Al-Badri said new quotas would be discussed at the next OPEC meeting in June, once Libya was producing at full strength.
Yesterday's decision should appease price hawks Iran and its allies and price doves Saudi Arabia and the other Gulf nations and avoids a repeat of OPEC's last abortive talks in June, when oil ministers disagreed publicly on how much oil to sell. Saudi Arabia labeled that the worst OPEC meeting ever. This time, they were keen to paper over the divisions.
Ahead of yesterday's talks, Iran had sought lower production for the cartel, which would raise prices. But it apparently bowed to Saudi Arabia, which wanted to maintain levels and which effectively sets OPEC policy as its largest producer.
Despite the compromise, Saudi-Iranian tensions overshadowed much of the meeting.
The OPEC statement said the target includes Libya, which is increasing production after its civil war ended. Libyan delegates said the country is pumping about 1 million barrels a day and plans to be up to pre-civil war levels of around 1.6 million barrels a day within six months.
The statement from the Organization of the Petroleum Exporting Countries said members have agreed to voluntarily lower production "to ensure market balance and reasonable prices," should future world supply exceed demand.
But by leaving it up to members to cut back on output if needed, the organization effectively acknowledged that it has given up efforts to act as a unified regulator of the oil market. The 30 million figure already represents overproduction of 11 percent from targets agreed to three years ago, the last time OPEC set output quotas on individual nations.
OPEC Secretary General Abdullah Al-Badri said new quotas would be discussed at the next OPEC meeting in June, once Libya was producing at full strength.
Yesterday's decision should appease price hawks Iran and its allies and price doves Saudi Arabia and the other Gulf nations and avoids a repeat of OPEC's last abortive talks in June, when oil ministers disagreed publicly on how much oil to sell. Saudi Arabia labeled that the worst OPEC meeting ever. This time, they were keen to paper over the divisions.
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