OPEC decides to maintain current production levels

But the entire process is proceeding much more slowly than many OPEC members would like and can afford.

Iran won’t accept any production curbs until it restores about 1 million barrels a day of output after the removal of worldwide sanctions next year over its nuclear program, he said.

“So we chose to postpone this decision to the next OPEC meeting, until the picture will be clearer for us to decide on a number”. We believe, however, that there are high risks that this may prove too slow an adjustment as inventories continue to accumulate and storage utilization nears high levels in the face of a mild winter, slowing EM growth and a potential lift of global Iranian sanctions.

Dr. Kachikwu maintained that OPEC remains committed to do its part in protecting the environment and supporting sustainable development adding that OPEC and its member countries are taking part in the climate change negotiations in Paris with the goal of full, effective and sustained implementation of the United Nations Framework Convention on Climate Change.

West Texas intermediate crude for January delivery dropped $1.11, or 2.7%, to close at $39.97 a barrel on the New York Mercantile Exchange. Once Iran starts pumping out the black stuff again, production numbers are only going to get bigger. Brent, the global benchmark, dropped US84c, or 1.9 per cent, to $US43 a barrel on ICE Futures Europe, posting a 4.1 per cent weekly loss. WTI was down 3.0 percent in early trading following the news.

Europe’s economic woes pulled the value of the eurocurrency near a 12-year low this week under $1.05. Russian Energy Minister Alexander Novak said Thursday that the country doesn’t see a production cut as viable.

With oil prices hovering near a six-year low, cash-strapped countries including Venezuela, Ecuador and Algeria are pressuring Saudi Arabia to cut production. The tactic was purportedly aimed at squeezing out high-priced US shale producers, which struggle to maintain output when crude prices dip. “The generally strong dollar trend [is] just one additional bearish item that the oil complex will need to contend with” this month, said Jim Ritterbusch, president of energy-advisory firm Ritterbusch & Associates.

For now, our price forecast reflects our belief that “financial stress” can solve the current market imbalance by gradually reducing excess supply capacity as demand recovers.

Analysts said however that the rise was likely to be short-lived as the Organization of the Petroleum Exporting Countries (OPEC) is expected to maintain current high output levels favored by influential members such as Saudi Arabia and other Gulf states. “Even if we keep cutting production that doesn’t solve any problems”.

“As OPEC grows as an organization it has to begin to look at cooperation, collaboration and cost efficiency”. Iranian Oil Minister Bijan Zanganeh announced that Iran also plans to produce unrestricted, pushing oil prices down further.