OPEC Discusses 30 Million-Barrel Ceiling
Members of the Organization of Petroleum Exporting Countries including Iran and Saudi Arabia agreed that the group should set a production ceiling of 30 million barrels a day, an OPEC delegate said.
The group may not allocate individual quotas to each of the 12 nations because there may be disagreement on how the total oil output should be distributed, the person said, declining to be identified because the matter hasn’t been decided.
Oil ministers arrived in Vienna this week for their meeting today, when they will decide output levels for the first half of 2012. OPEC’s last gathering in June broke up without consensus when six members including Iran and Venezuela opposed a push to pump more oil by Saudi Arabia and three other Gulf nations, which went ahead with an increase to make up for Libyan supplies lost during an armed rebellion to oust then leader Muammar Qaddafi. The group will begin discussions at 10 a.m. local time and a press conference is scheduled for 4 p.m.
“The meetings were good,” Iran’s Oil Minister Rostam Qasemi said after holding bilateral talks with his Saudi Arabian counterpart Ali al-Naimi. “There is coordination. There won’t be a production increase.” Saudi Arabia and Iran are OPEC’s two biggest producers.
‘Happy’ With Output
Saudi Arabian Oil Minister Ali al-Naimi said he’s happy with OPEC’s current output amid demand from “all over.” The world’s biggest crude exporter pumped 10.047 million barrels a day last month, he said the most in at least three decades.
Iran, the second-largest OPEC producer, expects oil prices to fall next year unless the group’s members comply with output quotas and rein in supplies to accommodate rising exports from Libya and Iraq, the Persian state’s OPEC Governor Mohammad Ali Khatibi said.
“It’s not a matter of cuts,” Venezuelan Energy Minister Rafael Ramirez said. “We have to accommodate again the Libyan production but maintain the same level of production, not increasing.”
The group will need to produce 30.1 million barrels a day next year to balance global crude supply and demand, its secretariat said yesterday in its monthly report. The International Energy Agency estimates that OPEC will need to pump 30.2 million barrels next year.
“That 30 million is what we forecast will be the average call on OPEC next year,” said Roy Jordan, an analyst at Facts Global Energy in London, who worked for more than 30 years at Royal Dutch Shell Plc. “We consider that to be a very reasonable level.”
Crude for January delivery dropped 26 cents to $99.88 a barrel as of 7:49 a.m. London time in electronic trading on the New York Mercantile Exchange. Yesterday, the contract gained $2.37 to $100.14, the highest settlement since Dec. 7. Prices are up 9.3 percent this year after climbing 15 percent in 2010.
OPEC last set a quota in December 2008, when the group announced record supply cuts. The 11 members that are subject to formal limits last month pumped 2.81 million barrels a day more than the 24.845 million-barrel agreed ceiling, a Bloomberg survey showed. Iraq is not bound by a limit.
The group’s 12 members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.
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