Fresh production cuts unlikely at OPEC’s Vienna meet
08 Sep 2009
As the world's major oil producers prepare to meet in Austria on Wednesday to thrash out production policies, OPEC members are likely to stress compliance with output limits set earlier this year, rather than insist on fresh production cuts.
Kuwait's oil minister Sheik Ahmed Al Abdullah Al Sabah today said in Vienna that current oil prices are reasonable and acceptable, and OPEC is expected to keep output unchanged when it meets on Wednesday.
At the same time, Saudi Arabia's oil minister Ali Naimi said that crude markets were "in good shape," boosting expectations that the Organisation of the Petroleum Exporting Countries is comfortable with the rebound in crude prices that came about after members announced in December a record 4.2 million barrel per day output cut from September 2008 levels.
Since that meeting, prices have roughly doubled, and are holding between $68 and $71. "Everything is in good shape," said Naimi, whose country is OPEC's top producer and widely seen as the group's kingpin. The current price of crude "is good for everybody: consumers and producers", he told reporters.
Saudi Arabia has said a price of about $75 per barrel is fair for the market, being a level that would encourage further investment in boosting global supplies while at the same time not straining the still-troubled world economy.
Russia won't pause
Russia may play the spoilsport. Not an OPEC member, it is surpassing Saudi Arabia in oil exports for the first time since the Soviet Union's collapse, as Prime Minister Vladimir Putin exploits the OPEC production cuts to gain market share.
