OPEC Maintains 30mbpd Output Targets
The Organisation of Petroleum Exporting Countries (OPEC) has decided to leave production ceiling at 30 million barrels per day (mbpd), as concern that global growth is shrinking outweighed calls by some members for supply cuts to stem sliding prices.
Ahead of yesterday’s meeting, some OPEC ministers said they expected the group oil to keep supply limits unchanged.
In a release issued at the end of its 161st meeting in Vienna, Austria, the 12-member organisation cited downside risks facing the global economy that could lower the demand for its crude as a key reason in agreeing to keep output targets steady.
The oil ministers noted that the heightened price volatility witnessed during the early part of 2012 was a reflection of geo- political tensions and increased levels of speculation in the commodities markets, rather than solely a consequence of supply/demand fundamentals.
OPEC has been exceeding its output limit this year as the prospect of sanctions against Iran, the group’s second-largest member, pushed Brent oil in March to the highest level since July 2008. Since then, concern that Europe’s debt crisis will erode fuel demand has driven the crude back below $100 a barrel, a level favored by Saudi Arabia, Venezuela and Libya.
Members were asked to cut production in excess of the agreed ceiling, OPEC Secretary-General Abdalla El-Badri said at a press conference at the end of the meeting.