OPEC maintains crude production as group defers output target

Kachikwu, the conference president who also represented Nigeria at the meeting, acknowledged that continued low prices will hurt his country.

Naimi earlier had said he hoped growing global demand could absorb an expected jump in Iranian production next year: “Everyone is welcome to go into the market”.

Noting there are at least three shooting wars within about 1,000 miles (1,600 kilometers) of about 30 percent of the world’s oil production in the Middle East, he writes: “Compared to today, a couple of years ago seems like a pretty calm time”. And if a Saudi-led production cut occurred without non-OPEC- member countries reducing their production, even many OPEC countries believe it might not give prices a lasting lift, meaning Saudi would gain nothing even while creating an opening for Iran to boost sales. “This is a holding decision”.

Because of overproduction chiefly by Saudi Arabia and non-OPEC producers, there is now up to 2.5 million bpd of excess oil in the market which has caused crude prices to lose around 60% of their value since mid-2014.

The next ordinary meeting of OPEC is set for June 2, 2016. While more countries are able to export oil, it gets in the way of making a path for clean energy.

Robert Minter, a strategist at Aberdeen Asset Management Investment, said: “The meeting was a bit of a disaster”. The ceiling was breached routinely by the group, Xinhua reported.

The price of Brent premium crude fell to around $43 a barrel in London futures trading, not far from a low last reached during the Great Recession in 2009.

Stiff Iranian opposition to any attempt to rein in its oil production left the OPEC oil cartel divided and unable to agree on a plan of action at a meeting December 4.

“We can not put a [production] number on it now”, said Abdalla El-Badri, Opec secretary-general, after the meeting.

“Iran is coming and we don’t know when it is coming”.

It’s clear that OPEC nations are not yet clear on which is the priority. The group pumped about 31.4 million barrels a day in October, according to its market report. But it later transpired that this was the level Opec ministers had pegged as the group’s current output level. OPEC requires consensus among members to alter its output ceiling.

The “breakeven” cost measures what oil price producers need to be profitable, the “cash cost” measures the absolute lowest level a producer can accept to keep their operation running (even if at a loss).

Analysts at Energy Aspects say the kingdom is “only likely to cut once it can influence the market again” – a scenario that is unlikely before the second half of next year considering present plentiful supply.

Friday’s news pushed oil prices down, with the US benchmark rate sliding 2.7 percent on the day to $39.99. “We didn’t decide to do anything”.

“I guess some people were holding out hope”.

The group of 12 OPEC countries account for about 40 percent of the world’s crude production.