OPEC said to lift oil target in line with current output

The International Energy Agency (IEA) said OPEC’s annual revenue may fall to 550 billion USA dollars from an average of more than 1 trillion US dollars in the past five years.

“The logic is simple”, he said, of OPEC’s present clout in a market where non-members such as Russian Federation and USA shale producers play an increasingly large role.

USA benchmark West Texas Intermediate (WTI) for delivery in January was up 28 cents at $41.36 and Brent crude for January was trading 26 cents higher at $44.10 at around 0600 GMT.

A final statement on the meeting was unusual in not mentioning any decision on production ceilings. This stubbornness is alarming to some of the weaker members of the organization, who are starting to fear the very real possibility of prices dropping as low as $20 a barrel. And we don’t accept, we don’t expect our colleagues in OPEC to put pressure on us to continue sanctions against Iran. There is no fear of that now, as Russian Federation will not be attending the meeting.

“He said Saudi Arabia will keep firm in its strategy of opposing any cut that is not previously coordinated with non-OPEC, obviously meaning Russian Federation”.

The key issue for OPEC is Iran, which is expected to return to the global oil market after the lifting of the worldwide sanctions early next year.

The production outlook appears to be a victory for Saudi Arabia, which has been under pressure from Opec’s poorer members to cut output and help bolster prices.

“Given the present position of the economy of countries that are purchasing (oil) and the worldwide economy, we will retain production at current levels”, said Kachikwu.

The group will maintain its current production, about 31.5 million barrels a day.

“In view of the aforementioned, and emphasising its commitment to ensuring a long-term stable and balanced oil market for both producers and consumers, the conference agreed that member countries should continue to closely monitor developments in the coming months”.

Saudi Arabian oil minister Ali al-Naimi said ahead of the meeting growing global demand could absorb an expected jump in Iranian production next year. Opec is now pumping out around 32 million barrels of oil per day.

But Moscow repeated this week it saw no chance of joint action, and Iran and Iraq yesterday also showed no willingness to curb supply.

OPEC believes that output from non-member states will eventually wane in light of the low crude prices, but Friday’s decision is also meant to accommodate new production from cartel members.