OPEC to hold oil flow steady
Sitting comfortably on strong oil prices, OPEC crude producers are
set to hold their output steady at their meeting in Angola on Tuesday
while eyeing the rising prospects of Iraq, observers say.
The meeting of the Organisation of Petroleum Exporting Countries caps
a year of recovery for oil prices which have more than doubled since the
cartel set strict quota cuts in the depths of the economic crisis 12
months ago. Since December 2008 when oil had fallen from a peak of more
than 147 dollars per barrel to a low around 32 dollars, major economies
have emerged from recession and the outlook for world oil demand has
strengthened.
With OPEC members enjoying prices between 70 and 80 dollars in recent
months, they will now be looking ahead to the impact of Iraq's
developing oil industry on the broader market, as well as the
longer-term effect of efforts to reduce carbon emissions to protect the
world climate.
OPEC's leading ministers have said they are happy with current prices
and agreed that quotas should remain at their current level of 24.84
million barrels per day (bpd).
"Inventories are coming down, the price is perfect, and all
investors, consumers, producers are all very happy," OPEC's most
powerful player, Saudi Oil Minister Ali al-Naimi, said this month when
prices were around 76 dollars. "The market is stable right now,
volatility is minimum and everybody is happy with the price." Oil prices
jumped above 74 dollars on Friday, accelerating earlier gains after a
report that Iranian forces had taken control of a disputed oil well with
Iraq, traders said.
New York's main futures contract, light sweet crude for January,
stood at 74.14 dollars. Brent North Sea crude for February delivery
traded at 74.50 dollars.
"Compliance (with existing quota cuts) is slipping, most members are
happy with current prices - no need really to do anything" to the
production quotas, VTB analyst Andrey Kryuchenkov told AFP ahead of
Tuesday's meeting.
"Iraq is going to be their headache in years to come," he added,
citing its ambitious aims to boost production after it auctioned off
contracts to foreign firms to pump oil from several of its oil fields.
A US embassy official in Baghdad said Iraq would be a "big player" at
the Angola meeting where it would seek to increase its quotas. |
