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OPEC set to hold oil output despite price slump

Steel News - Published on Tue, 19 Jun 2012

AFP reported that OPEC appeared set to maintain its oil production ceiling despite a recent dramatic slump in crude prices due to a slowdown in global economic growth and the eurozone debt crisis.

Ahead of the 1400 GMT meeting, oil ministers hinted that the Organization of Petroleum Exporting Countries would likely overcome differences between members and maintain a ceiling of 30 million barrels per day.

Mr Jose Botelho de Vasconcelos oil minister of Angola said that \"For all of us, the goal is to achieve the consensus. This is the goal of our organization. Last December, the ceiling was set at 30 million barrels per day. I think this ceiling is good.\"

OPEC\'s dozen nation members are in fact collectively pumping out more than the ceiling with estimates ranging from between 1 and 3 million barrel per day extra helping to push down oil prices.

Brent crude prices have slumped USD 30 since March mainly on expectations of weaker demand caused by the eurozone debt crisis and amid a slowing Chinese economy. The price of Brent crude oil the European benchmark has tumbled from USD 128 per barrel in early March to USD 96.

Mr Vasconcelos said that \"For us a better price is USD 100 of course. The OPEC ministers might discuss the problem of oversupply.

Mr Abdel Rahman bin Yezza oil minister of Libya expressed concern over falling prices, which reduce OPEC members\' revenues. We\'re always worried about the prices, of course while not specifying his preferred level. We have to get together and decide.

OPEC members have been divided over how to respond to plunging prices and uncertainties over global energy demand with kingpin Saudi Arabia recently ramping up production while hawks Venezuela and Iran have called for cuts.

According to OPEC estimates, in the Q1, Saudi output jumped 250,000 barrels per day to 9.9 million barrels per day from a year earlier in anticipation of sanctions on the organization\'s second biggest oil producer Iran.

Mr Andrey Kryuchenkov commodities analyst at Russian financial group VTB Capital said that \"The market was holding its breath ahead of today\'s OPEC regular policy meeting in Vienna, at which we expect no changes to the exporting group\'s current production target of 30 million barrels per day.

Markets are deeply concerned that a victory for anti austerity parties in Athens could herald the exit of Greece from the euro, creating further turbulence in the currency bloc and lower economic growth and demand for oil.

Source – AFP

Posted By : admin on Tue, 19 Jun 2012
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