Qatar’s Minister of Energy and Industry H E Dr Mohammed bin Saleh Al Sada attending the 164th Ministerial meeting of the Opec in Vienna yesterday. The Minister later left for Zagreb on an official working visit at the invitation of the Government of the Republic of Croatia.
VIENNA: Opec agreed yesterday to hold its crude production ceiling at 30 million barrels per day despite oversupply concerns and competition from cheaper shale oil.
The Organisation of Petroleum Exporting Countries, which pumps out about one third of the world’s oil, failed again to decide on a new secretary-general amid group tensions, instead keeping Libya’s Abdullah El Badri as its administrative head for 2014. And Libya will assume the cartel’s rotating presidency for next year, Opec added in a communique.
The decision to maintain the oil ceiling had been widely expected by markets. The cartel, which could see higher production from its members Iran, Iraq and Libya in coming months, nevertheless faces competition from non-Opec producers of shale oil.
The International Energy Agency has said repeatedly that the shale energy boom is changing the landscape of global energy markets. “We don’t say we are not concerned” by shale, El Badri told a press conference yesterday — but insisted that Opec could accommodate US shale output, currently at 2.7 million barrels per day and set to rise further.
Opec said in its statement that “global economic uncertainty, with the fragility of the eurozone remaining a concern” was the biggest challenge facing world oil markets in 2014. It said that “although world oil demand is forecast to increase during 2014, this will be more than offset by the projected increase in non-Opec supply” amid a boom in oil and gas being extracted from North American shale rock. Opec added: “Nevertheless, in the interest of maintaining market equilibrium, the conference decided to maintain the current production level of 30 million barrels a day.”
Ahead of the meeting, Saudi Arabia insisted that there was no need to change the ceiling. “We know demand is good, economic growth is good, supply is good,” Saudi Oil Minister Ali bin Ibrahim Al Nuaimi said.
The group, with a dozen member nations from the Middle East, Africa and Latin America, is producing slightly below its output target. But production could increase in the coming months as Iraq and Iran look to export more crude. Libyan supplies may also recover.
Saudi Arabia and other Opec members argue that benchmark crude oil prices, currently averaging $100 per barrel, provide acceptable income for producers without weighing too heavily on consumers.
“The price of oil is acceptable and there will be some additional oil coming to the market from Opec and outside Opec,” Qatar’s Minister of Energy and Industry H E Dr Mohammed bin Saleh Al Sada said. “What is more important is that this additional oil will be needed for the signs of economic recovery.” Al Sada added: “The current (output) situation seems to be comfortable... 30 million barrels seems to do justice to the current economic situation.”