VIENNA - The Organization of the Petroleum Exporting Countries Monday appeared to still be on track to maintain its current oil production ceiling, after officials from member countries said conditions in the market support the status quo.
OPEC's internal forecasts show demand for its crude oil continuing at around 30 million barrels a day in 2013, in line with the group's current production ceiling, said a person who was present at the meeting of OPEC's Economic Commission Board in Vienna Monday. The group's latest forecasts indicate that growth in global oil demand next year of around 800,000 barrels a day will be more than covered by increased production of 900,000 barrels a day from countries outside OPEC, primarily the U.S. and Canada, said one OPEC delegate.
"There is a balance between supply and demand in the global oil market," the Chief Executive of state-run Kuwait Petroleum Corp., Farouq al-Zanki, told reporters in Kuwait City, according to Kuwait News Agency, or KUNA. Mr. al-Zanki is not an OPEC official, but is the most senior executive in the country's state-controlled oil industry.
"There is no need to make a decision about increasing or cutting the production of member countries during the meeting in Vienna," he told KUNA.
OPEC's meeting on Wednesday, "is likely to end with a communiqué that leaves intact both the 30 million barrel-a-day production level, and the absence of country-level production targets," said Jamie Webster, head of the market intelligence service at consultancy PFC Energy, in a research note. The 30 million barrel-a-day ceiling agreed a year ago is a collective limit on production and no countries currently have individual targets.
One influential delegate, Iran's OPEC governor Mohammad Ali Khatibi, expressed concern that the group's actual oil production of around 31 million barrels a day could lead to growth in oil inventories next year, according to Iranian oil ministry website Shana. Rising inventories typically exert downward pressure on oil prices.
"A production cut is needed in the first quarter," to bring supply and demand into balance, but OPEC as a whole is likely to ignore the issue at this meeting, said Mr. Webster. Saudi Arabia is more likely to act on its own initiative next year to reduce production, but possibly not until the price of Brent crude falls below $90 a barrel, he said.
Benoit Faucon contributed to this report.
Copyright (c) 2012 Dow Jones & Company, Inc.
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