Opec last night decided to leave its oil output ceiling unchanged, Algerian Energy and Mines Minister Youcef Yousfi said after a key meeting in Vienna.
The 12-nation Organisation of Petroleum Exporting Countries (Opec), which pumps one third of the world’s oil, decided “to keep” its actual output ceiling at 30mn barrels per day (bpd) that was agreed in December, Yousfi said.
“It was a good meeting,” UAE Energy Minister Mohamed bin Dhaen al-Hamli told journalists as he left the meeting at Opec headquarters in Vienna.
Saudi Arabian Oil Minister Ali al-Naimi added that he was “happy” without elaborating.
More details are expected at a press conference with Opec secretary-general Abdullah al-Badri and Iraqi Oil Minister Abdulkarim al-Luaybi.
At yesterday’s meeting, ministers grappled with plunging crude prices, the eurozone debt crisis and the weak global economy.
Opec’s deal to retain its output limit implies a cut in supply of 1.6mn bpd, Badri said.
“We asked the member countries to adhere to 30mn barrels per day. Now they know they are producing 31.6mn barrels per day and they’ve been asked to reduce the 1.6mn and adhere to the 30mn,” Badri said.
Saudi Arabia raised output sharply to 10.1mn bpd in April, reducing slightly in May to 9.8mn.
Badri did not name specific member countries but said: “Not all of them are part of the 1.6mn bpd. The countries that are part of the 1.6, we did not mention them, they will come back to the 30.
“They agreed. This is a collective decision.” He was speaking at a news conference after Opec agreed to keep that limit in place until it meets next on December 12, but did not specify individual output quotas for its members.
“The conference decided that member countries should adhere to the production ceiling of 30mn barrels per day,” Opec’s official communiqué released after the meeting said.
Oil futures rose yesterday after the Opec agreement. Oil prices on both sides of the Atlantic had fluctuated earlier, awaiting the results of the Opec meeting and as investors fidgeted ahead of the closely watched Greek elections at the weekend.
The more actively traded Brent August crude ended up 45¢ at $97.17 a barrel. The expiring July Brent crude settled down 10¢ at $97.03, the lowest level since January 2011.
US July crude settled at $83.91 a barrel, gaining $1.29, after hitting a session high of $83.93. It had ended the previous session at the lowest since October 6.
“Oil prices rallied on Opec seemingly holding together by agreeing to a production ceiling,” said John Kilduff, partner at Again Capital in New York. “It was a victory for the group that the meeting did not end in disarray, he said.
The recent strong refinery activity in the US gave West Texas Intermediate, the US benchmark, more of lift than Brent, Kilduff said, noting that Brent had been “held back by the continuing euro debt crisis, punctuated by the upcoming Greek elections,” he added.
Volumes were subdued, with both Brent and US crude trading about 10% below their 30-day averages, according to Reuters data.
Earlier, Brent crude alternately moved on either side on unchanged, as investors believed the eurozone debt crisis was far from over, after ratings agency Moody’s downgraded Spanish sovereign debt to one notch above junk status and put it on review for US crude rose, initially lifted by gains on Wall Street, despite data showing that the number of Americans filing for jobless benefits rose last week for the fifth time in six weeks. The data underlined persistent weakness in the labour market in the world’s largest oil consumer.
Another set of data showed that consumer prices fell in May, raising fresh hopes that the US Federal Reserve would help the weakening economy though additional monetary stimulus.
Extra Saudi oil is said to be largely responsible for lifting Opec output to 31.6mn bpd, well above the group’s formal target that was first set in December.
Oil prices have dropped from a $128 peak for Brent crude in March to $97, and from $110 for US crude, also set in March, to $83, in part because the economic outlook has darkened but also because of increased Saudi output that in April set a 30-year high of 10.1mn bpd.
Raising output was a deliberate move by Riyadh to counter the possibility that Iranian oil output falls heavily when a European Union embargo on Tehran starts next month. Iranian production is already down to a 20-year low. from gulf times.