OPEC ministers keen to keep oil production at current levels

The decision is likely to push the price of oil further south by endorsing present output
The decision is likely to push the price of oil further south by endorsing present output

OPEC oil ministers have effectively scrapped their official output ceiling and agreed to keep producing above that level.

A statement issued at the end of the meeting in Vienna did not mention any decision on how much the 12-nation Organisation of Petroleum Exporting Countries should pump, but officials told reporters there was agreement to continue producing at present numbers.

The official ceiling remains 30 million barrels a day, but for more than a year now there has been overproduction ranging from just over a million barrels a day to nearly twice that much.

OPEC is unhappy with crude prices hovering at around $40 a barrel, but only a few members appeared ready to cut output in an attempt to drive up supply and prices.

An attempt to nudge the cost of oil higher would have involved lowering output, thereby reducing supply and driving demand higher. Instead, the decision is likely to push the price of oil further south by endorsing present output.

Iran once pumped around four million barrels a day and is now down to about half that.

However,the country currently preparing to come back fully on line once it sheds nuclear-related sanctions in a few months.

Iraq is also resurgent. The world’s fastest-growing source of crude this year, it was pumping more than four million barrels a day last month and was responsible for last month’s biggest monthly rise in output among all OPEC countries.

The ministers agreed to readmit past member Indonesia, to expand their ranks to 13. While that country’s production goes mostly for domestic consumption, the move could add to the total amount of OPEC barrels on sale.

A final statement on the meeting was unusual in not mentioning any decision on production ceilings.

But conference president Emmanuel Ibe Kachikwu told reporters that there was agreement to maintain “current actual production”.