OPEC not to boost output until stocks fall

A conference of the Organisation of Petroleum Exporting Countries held at the OPEC headquarters in Vienna has decided to maintain current crude production levels unchanged.

The OPEC conference chaired by its president and minister of petroleum of Angola, José Maria Botelho de Vasconcelos, noted that despite some recent positive economic indicators that point towards the possibility of the recession bottoming-out before year-end, the world is nevertheless still faced with weak industrial production, shrinking world trade and high unemployment.

The conference observed that the severe and broad impact of the ongoing global economic downturn, precipitated by the financial crisis, has led to a weakness in global oil demand, which is likely to remain for some time.

Indeed, since the second half of 2008, world oil demand growth has witnessed its first decline since the early 1980s.

''The crude volumes entering the market are still in excess of actual demand,'' it observed, adding, ''Although crude inventories have fallen over the preceding two months, stocks remain high (end-April 2009 OECD commercial oil inventories are standing close to the record high witnessed in February 1998).''

Besides, OPEC said, the price volatility witnessed over the past 12 months coupled with low demand has deterred oil producers from continuing to make investments required to guarantee adequate energy supplies in the medium-to-long term, given the cost of adding new capacity.

However, OPEC said, the organisation will continue to closely monitor the market and review the situation at the next ordinary meeting of the conference in Vienna on 9 September.

While reiterating their statutory commitment to providing an economic and regular supply of petroleum to consuming nations, OPEC heads of delegation, however, said its objective was stabilising the market and maintaining crude oil prices at fair and equitable levels.