Iran Sees OPEC Maintaining Current Oil Output
TEHRAN (AFP), Sept. 7, 2009
Iran, the second largest exporter of the Organization of Petroleum Exporting Countries, predicted on Sunday the cartel will maintain current oil output at its meeting next week, despite producers being unhappy with the prevailing price of crude.
"There is a feeling among OPEC oil ministers that the group wants to maintain current ouput levels," Mohammad Ali Khatibi, Iran's representative to OPEC, told AFP ahead of Wednesday's meeting of the group in Vienna.
"I think it is unlikely we will see any noticeable change. Based on comments already made by OPEC ministers, the output ceiling will not change."
OPEC, whose 12 members pump 40% of the world's oil, agreed in late 2008 to remove a massive 4.2 million barrels a day of output from the market in a bid to shore up crumbling prices.
OPEC's official daily quota has stood at 24.84 barrels a day since January, but despite some signs of an economic recovery world energy demand still remains weak.
A vicious global economic downturn has brought down demand for energy, dragging crude prices from record highs of above $147 in July 2008 to $32 in December. They have since recovered to around $70 a barrel.
The New York benchmark oil price for light sweet crude for October delivery stood at $68.02 at Friday's close.
Khatibi said OPEC members were unhappy with the current oil price.
"A good price is one when all producers, consumers and investors are relatively satisfied. As far as I know, producers are unsatisfied and they believe the price should be higher," he said.
"Although prices are around $70 a barrel, we have to see how much $70 is worth as the value of dollar has decreased," he said, adding that the oil market was heading towards stability but hadn't yet arrived.
However, analysts say most OPEC member countries are satisfied with prices in the range of $70-$80, enough to fund investment in future production, despite calls from Iran and Venezuela to push them higher.
"At $70 there is no pressure to lower production. Everyone is earning well. There is no pressure to lift production either," Frederic Lasserre at French bank Societe Generale said.
"Demand has not really recovered," including in the key energy-hungry Chinese market, he said.
Copyright (c) 2009 Dow Jones & Company, Inc.
- BLOG: What do Rigzone Readers Think of the OPEC/NOPEC Deal? (Dec 07)
- Big Shale Turns OPEC Ally From Foe With Focus on Oil Returns (Dec 04)
- OPEC, Russia Agree Oil Cut Extension To End Of 2018 (Nov 30)