LONDON (AFP) –
OPEC meets on Friday in Vienna and is expected to maintain its crude production ceiling, with Brent oil prices steady above $100 a barrel, analysts said, with angst over weaker demand particularly from China.
Ministers from the Organization of Petroleum Exporting Countries (OPEC) will convene in the Austrian capital amid demand worries linked to poor global economic growth, and with one eye on the prospect of booming US shale output.
The dozen-member cartel, which pumps about 35 percent of global oil supplies and includes countries from Africa and Latin America, will also use its latest gathering at its headquarters to seek progress towards appointing a new secretary-general.
Saudi Arabia’s influential Oil Minister Ali al-Naimi, who arrived in Vienna on Tuesday, said conditions were ideal for the the oil market.
“Supply is plentiful, demand is great, inventories are in balance, so what else do you want?” Naimi said.
Industry experts expect that OPEC will leave its collective oil production ceiling at 30 million barrels per day (mbpd), where it has stood since the end of 2011, despite actual output exceeding this official target level.
“Expect little new, with the unchanged status quo for now,” Andrey Kryuchenkov, an analyst at Russian financial group VTB Capital, told AFP, noting that $100 is “a decent and profitable level for most members”.
Benchmark Brent oil prices, which stood at about $110 a barrel at the time of OPEC’s previous meeting last December, plunged under $100 in April for the first time since mid-2012 on the back of global demand concerns, abundant US crude reserves and a strong dollar.
However, the market has since stabilised above the $100-a-barrel level that is deemed acceptable by Saudi Arabia — the biggest oil producer in the cartel and which has the largest amount of spare capacity.
Concerns over the global outlook returned on Wednesday after gloomy downgrades to economic growth forecasts.
The International Monetary Fund cut its 2013 growth forecast for China — the world’s biggest energy consumer — to around 7.75 percent, from 8.0 percent last time, and cited a sluggish global recovery.
And the Organisation for Economic Cooperation and Development also cut its growth forecasts for most advanced countries apart from Japan.
The new energy minister of OPEC member the United Arab Emirates, Suhail al-Mazrouei, meanwhile declared on Monday that current oil prices were “convenient and fair” and did not pose a threat to the global economy.
He added that a “fair” price was one that “fluctuates within a narrow range, guarantees a return for large investments needed to produce oil, and does not harm global economic growth”.
However, this year’s price falls have sparked calls from Iran – whose output has been hit by an oil embargo — for lower production to boost prices. Fellow OPEC hawk Venezuela has also declared that it would be open to a cut despite looking to keep prices at around $100.
Venezuela’s Energy Minister Rafael Ramirez has meanwhile insisted that the cartel as a whole wants to see prices kept at about $100.
The cartel’s “real” output climbed to 30.46 mbpd in April from 30.18 mbpd in March, according to OPEC data. But the International Energy Agency estimates that it stood at 30.7 mbpd last month, partly owing to a strong production increase from Saudi Arabia.
Also at this week’s OPEC oil meeting, ministers will seek progress over the appointment of a successor to the cartel’s secretary-general, Libyan Abdullah El-Badri.
Back in December, OPEC voted to re-appoint El-Badri to lead the cartel for another year after members failed to agree on a new leader.
Saudi Arabia has been battling against Iraq and Iran to have its candidate succeed El-Badri, who has steered the cartel through the world’s financial crisis as its administrative head since 2007.
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