OPEC set to maintain policy as oil glut worsens

About electing the new secretary general of OPEC, Asali said that Iran, Iraq, Nigeria and Saudi Arabia have candidates and surely Iran would not vote for Saudi candidate and the same way Saudis would vote no to Iran’s.

Iranian oil minister Bijan Zangeneh said Tehran would be prepared to discuss OPEC quotas or other action only when his country reached full output levels, when and if Western sanctions on the country are lifted next year.

But Riyadh and its Gulf allies appeared on Friday to be ready to stick to their strategy of defending market share, hoping that lower prices would ultimately drive higher cost producers, such as US shale oil firms, out of the market. The move helped to send Brent crude, the global benchmark, down to US$42 a barrel from near US$100.

With oil prices hovering near a six-year low, cash-strapped countries including Venezuela, Ecuador and Algeria are pressuring Saudi Arabia to cut production.

OPEC’s policy meeting will be held in Vienna on Friday. “Nothing has been curtailed”.

Russian Energy Minister Alexander Novak said yesterday that the country doesn’t see a production cut as viable.

Iran will raise production by up to 1 million barrels per day following years of forced curbs because of the sanctions over its atomic program, he added.

“We are here to listen”, he said before the OPEC meeting. Ecuador agrees with such a proposal and wants OPEC to comply with its collective output target, Hydrocarbons Minister Carlos Pareja said in an interview in Vienna.

Nigerias Minister of State for Petroleum Resources and President of the OPEC Conference Emmanuel Ibe Kachikwu, left, speaks to journalists prior to the start of a meeting of the Organization of the Petroleum Exporting Countries, OPEC, at their headquarters in Vienna, Austria, Friday, Dec. 4, 2015. But prices would still be low, the document said, because the world has stored so much oil during this time of plentiful supplies.

Iraq and Iran are longtime OPEC members.

OPEC’s annual revenue may fall to $550 billion from an average of more than $1 trillion in the past five years, the International Energy Agency said November 10. Venezuela, Iran and Iraq don’t possess similar wealth, making them more vulnerable to the market slump. The Paris-based IEA was established four decades ago to provide a counterweight to OPEC following the Arab oil embargo, and traditionally maintains a laissez faire policy toward markets.

These trends mean that the pressure is on Saudi Arabia, which accounts for about a third of OPEC’s output, to cut back.

Indonesia is producing about 850,000 barrels of oil per day and OPEC could increase its daily output ceiling to 30.85 million to reflect the change, according to analysts. OPED needs consensus among all its members before changing the group’s output target.

He added that he was not anxious about Iran’s return to the market and that it would be “ridiculous for any OPEC member to expect Iran [to stay] out of the market”.