The cartel “decided to maintain the ceiling and requires member countries to comply. By agreeing on this decision the member countries confirmed their commitment to a stable and balanced oil market “, announced OPEC.
The cartel decision was widely expected because during its last meeting in November, OPEC left its output ceiling unchanged, aiming to contain the production of countries outside OPEC and stimulate request.
The slowdown in production of unconventional oil such as oil shale in the United States and oil tar sands in Canada, was seen as a victory for the organization.
From the demand side, Mohammed Bin Saleh Al Sada, Minister of Energy of Qatar, who chaired the meeting, noted that members were reassured by the global economic situation: “The overall trend is positive (…) and demand is expected to increase. We see a good trend of supply-side and demand “.
The application has significantly improved thanks to lower prices, thanks to imports from countries such as India and China, which have benefited from the fall in prices to fill their reserves.
glut of supply
But the offer is superabundant and continues to pressure prices .
Russia, the world’s largest oil producer (not member of the organization), aims to maintain production. OPEC exceeding its side today its ceiling, with a production of 31.21 million barrels per day in April, and oil reserves in the US are at record levels.
Several countries whose finances suffer from the decline in oil revenues have expressed their wish to increase prices to make ends meet and continue to invest in the oil sector.
Minister of Oil of Kuwait, Ali Saleh Al-Omair, said he was very pleased with the decision of the cartel. Yet he had said the day before that if prices did not reach 77 dollars per barrel, the budget of his country would soon be in deficit. Other countries, such as Angola, need a barrel to 80 dollars, and out of the meeting the Angolan Oil Minister Jose Maria Botelho de Vasconcelos launched to the press that there was no had “big discussion” .
“It is true that in the last four years we have benefited from oil prices to 100 dollars” but OPEC is facing a new reality, found the secretary general of OPEC, Abdullah El-Badri at the press conference after the meeting.
“Prices rose 30% in recent months despite the increase in OPEC production. This rebound was a lifeline for members of the cash-strapped cartel. But it is too much to say that OPEC’s strategy of leaving to slow down over the more expensive crude production worked “ said Richard Mallinson, analyst at Energy Aspects.
Back Iran
The cartel members also had to discuss the return of Iranian production on oil markets. If international sanctions against Iran are lifted in June the country, a member of OPEC, could produce a million barrels a day in additional six months, according to the Iranian Oil Minister.
On leaving the meeting the Iranian Oil Minister Bijan Namdar Zangeneh, said the country did not need a deal (with OPEC, Ed). “We will return to the market when the sanctions are lifted,” , has he said.
Abdallah El-Badri, said it was too early to discuss the return of the Iranian offer. “When the time comes we will consider their request” , he added.
“We lived with an Iranian offer to six million barrels per day in the 70s, the market is large enough to accommodate the production of this country “, Adel Abdel Mahdi said, Iraqi Oil Minister.
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