Oil Falls As OPEC Keeps Output Despite Glut

But in a break from that strategy, OPEC has held production steady since past year in a bid to defend-and extend-its share of the oil market.

According to a survey by Bloomberg, OPEC production in November rose to an above-target 32.1 million barrels per day. The world’s fastest-growing source of crude this year, it was pumping more than 4 million barrels a day last month and was responsible for last month’s biggest monthly rise in output among all OPEC countries.

The cartel’s Secretary-General Abdullah al-Badri said during the Friday press conference in Vienna that OPEC will wait to decide on a quota until Iran’s return to the oil market.

The movement came as a Reuters report suggested that the Organization of Petroleum Exporting Countries (OPEC) had decided against supporting falling crude oil prices, when representatives met in Vienna today.

Indonesia’s re-entry will “simply acknowledge the reclassification of Indonesian output from non-OPEC to OPEC production”, said Julian Jessop, analyst at Capital Economics research group. On Friday Brent was down 1.2 per cent to $US43.31near midday trading in NY.

Oil prices fell on Friday after news that Organisation of the Petroleum Exporting Countries (Opec) was planning to maintain its production near record highs, despite depressed prices, as the producer group continued to seek share of an oversupplied market.

“We have said on more than one occasion, we are willing to cooperate with anyone who can balance the market”, said Saudi Arabian oil minister Ali al-Naimi. “The burden to adjust supply remains on non-OPEC producers”.

Saudi Arabia along with Kuwait, UAE and even Qatar consist the main supporters of preserving the status quo of supply and demand as well as the price of crude oil in the market and are consequently opposed to any reduction in production rates.

Light, sweet crude for January delivery recently fell 89 cents, or 2.2%, to $40.19 a barrel on the New York Mercantile Exchange.

“Without the Gulf group, there can be no effective OPEC agreement”, IHS Energy said in a report ahead of Friday’s meeting. At its peak, the oversupply was estimated to amount to 2 million barrels per day. “That’s the argument that has carried the day in Opec, and the heavy pressure on non-Opec producers, especially U.S. shale, is going to be kept up”.

OPEC has 12 member states, namely Iran, Iraq, Algeria, Angola, Ecuador, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela.