OPEC set to keep oil output unchanged

GMT 09:39 2015 Friday ,05 June

Arab Today, arab today OPEC set to keep oil output unchanged

Organization of the Petroleum Exporting Countries
Vienna - AFP

The OPEC oil producers' cartel was set Friday to leave its output unchanged despite abundant supplies and low oil prices, as ministers maintain the pressure on booming US shale.

Ministers were gathering at OPEC's plush Vienna headquarters for a meeting due to start at 1000 GMT, amid ongoing fears over chronic global oversupply that sparked a recent oil price collapse.

The Organization of the Petroleum Exporting Countries, which accounts for a third of the world's oil supplies, will likely pursue its plan to preserve market share and pressure high-cost US shale producers.

OPEC switched strategy last November when it opted to leave its official collective production target at 30 million barrels per day -- where it has stood for about three and a half years -- despite an oil price slump that slashed precious revenues for its 12 member nations.

In Friday morning deals ahead of the meeting, New York's West Texas Intermediate (WTI) crude and London's Brent oil both fell again as traders fretted that a no-change OPEC decision would further fuel the burgeoning global supply glut.

WTI for July delivery was down 34 cents at $61.69 per barrel, while Brent for the same month dipped 46 cents to $57.54.

Officials this week expressed some frustration with low price levels, but gave no hint that they would move to cut output to tighten supply.

Analysts argue that OPEC is seeking to hurt shale and deep-water oil producers that need high prices to make their operations profitable.

In the run-up to Friday's meeting, ministers declared they would be happier with prices between $75 and $80 a barrel to boost revenues and help balance their budgets.

Angola, Ecuador, Iran, Iraq and Venezuela have all appealed for higher prices, but Saudi Arabia has expressed contentment with OPEC's strategy.

The global oil market, plagued with demand worries, oversupply and booming US shale output, collapsed by around 60 percent between June 2014 -- when WTI crude stood at about $106 per barrel -- and late January, when it hit a six-year low under $45.

Losses accelerated in November after OPEC's change in policy, but some analysts say the strategy has paid off as US shale oil producers have been squeezed and crude has recovered somewhat in recent months, helped also by the brighter outlook for the world economy and energy demand.

Despite the collective target, OPEC is actually producing about 31.2 million bpd according to International Energy Agency data, due to extra supplies from Saudi Arabia and also Iraq which has ramped up output in southern and northern areas not hit by Daesh jihadists.

Analysts fear the market could be further saturated with oil from Iran should Western sanctions be lifted after a nuclear deal with world powers.

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