OPEC is set to carry on pumping oil nearly flat-out for months more, content that last year’s shock market therapy has revived demand and knocked back growing competition, according to Reuters.
With oil prices having stabilised at around $65 a barrel, some $20 above their January lows, there’s little appetite within the Organization of the Petroleum Exporting Countries to modify production limits or address Iran’s request to give it more room in the market as sanctions ease.
“There is consensus among Gulf OPEC countries, and others, to keep the ceiling unchanged,” a senior Gulf OPEC delegate told Reuters late on Tuesday after an informal meeting of the four core Gulf Arab OPEC members earlier in the day.
Iraqi oil minister Adel Abdel Mahdi said there was “optimism and general acceptance with the current situation”.
The group meets on Friday following a two-day seminar featuring the chief executives of the world’s biggest energy groups, including BP and Exxon, companies whose fortunes have been abruptly altered by OPEC’s decision to abandon efforts aimed at sustaining oil prices at more than $100 a barrel in favour of defending market share.
“Nobody wants to rock the boat,” the Gulf source said. “The meeting is expected to be smooth sailing.” OPEC Secretary-General Abdullah al-Badri said on Wednesday that it would likely be a brief meeting. “Everything is very clear,” Badri said.
That marks a change in tone from OPEC’s last meeting in November 2014, when Venezuela and others mounted an unsuccessful bid to convince Saudi Arabia and its Gulf allies to tighten the taps on supply.
Instead, Saudi Arabia laid out its new laissez faire approach, saying it will no longer consider cutting output without the cooperation of non-OPEC producers such as Russia. This time, calls for collaboration have been muted as most ministers look forward to a more balanced second half. “You can see that I’m not stressed, I’m happy,” Saudi oil minister Ali al-Naimi said on Monday.
OPEC members are producing more than 1 million barrels per day (bpd) above the group’s collective ceiling of 30 million bpd, with Saudi output at its highest in at least three decades, a Reuters survey showed, leaving the group little room to pump more.
