OPEC said happy with the status quo

OPEC said happy with the status quo

OPEC has no reason to change policy at a meeting in Kuwait on Monday because the oil market is well supplied and prices are at an acceptable level, but a drop in production looks likely early next year, analysts said.

Several ministers from the 11-nation organization of Petroleum Exporting Countries have indicated they would renew their production quota, which stands at 28 million barrels per day, at the one-day meeting in Kuwait City.

Kuwaiti Oil Minister Sheikh Ahmad Fahd al-Sabah, who is also president of the cartel, said a week ago that he would recommend that OPEC "continue with our production and not make any cut at the next meeting."

The group will have pumped 30.3 million bpd of crude in the fourth quarter if production from Iraq is taken into account, the minister said. The war-torn country's contribution is not included in the official quota system.

OPEC agreed in September to make an extra 2.0 million barrels or oil available per day in view of hurricane disruption to North American output.

Sheik Ahmad's comments coupled with those of OPEC kingpin Ali al-Nuaimi, the Saudi oil minister, "leave little doubt as to the result of their 12 December meeting," said Frederic Lasserre, a Paris-based analyst for Societe Generale.

"OPEC should maintain its production quota at 28 million bpd," he said.

Simon Wardell, an analyst for Global Insight in London, agreed.

The ministers "are probably fairly comfortable where things stand at the moment," he said.

The global economy remains on solid ground despite a recent oil crisis, while producer countries are reaping record revenues from prices that remain well above 50 dollars a barrel.

Consumer countries - while conscious of their own insufficient energy infrastructures, particularly in terms of refining capacity - are trying to pressure OPEC members to invest more and prepare for an explosion in demand over the coming decades.

The Group of Seven rich countries, which met in London on Saturday, stressed the "need to improve further the transparency of demand and supply in the oil market," including the creation of a global standard for reporting crude reserves.

Updated : 2021-03-08 06:38 GMT+08:00