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OPEC Decides To Keep Output Unchanged-OPEC President

OPEC Decides To Keep Output Unchanged-OPEC President
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Πεμ, 14 Οκτωβρίου 2010 - 17:11
The Organization of Petroleum Exporting Countries decided Thursday again to keep its production policy unchanged, OPEC officials said Thursday.
The Organization of Petroleum Exporting Countries decided Thursday again to keep its production policy unchanged, OPEC officials said Thursday.

The decision was confirmed by OPEC President Wilson Pastor following a ministerial meeting Thursday afternoon.

"It's officially a no change," an OPEC delegate said.

The group's 12 ministers, meeting for the first time since March, decided to keep their production quotas at the same level they have been since December 2008. The move follows similar decisions by OPEC in 2009 and in March 2010 to keep the quota system unchanged.

The cartel's decision, widely expected, comes as oil producers continue to enjoy strong and consistent oil prices. At the same time,the decision came flagged with concern about the uncertainty over the health of economic recovery and the weak U.S. dollar that is undercutting the purchasing power of many OPEC states.

Brent crude was trading at $85.07 a barrel Thursday afternoon, up 24 cents.

The widely anticipated move reflected most members' relative contentment with oil prices. OPEC, whose crude accounts for four out of every ten barrels burned globally daily, has been in a rather comfortable position for many months, benefiting from rising oil prices while producing a lot more crude than its output quotas technically permit.

However, some OPEC states are hankering for even higher oil prices in the months ahead. "I think $100 is a perfect price for next year," Shokri Ghanem, the head of the Libyan National Oil Co., told journalists here at the group's headquarters.

But that sentiment jarred with OPEC's most important member, Saudi Arabia . The kingdom, the world's biggest crude exporter, said it still prefers an oil price between $70 and $80, a level widely seen among many oil-producing and consuming nations as adequate enough to support oil drilling investments without financially hammering consumers.

Saudi oil minister Ali Naimi said the kingdom was "very happy with how things are in the market" and downplayed the calls from some hawkish ministers--under pressure at home from fragile economies--for higher prices to compensate for a weaker US dollar against the euro and other currencies.

"Everybody has their own opinion. We (in the kingdom) are happy with the way the market is," Naimi said.

Naimi's comments carry weight because Saudi Arabia sits on roughly 4.5 million barrels a day of spare oil pumping capacity that can be tapped to keep oil inventory--the criteria OPEC watches closely to influence prices--at healthy levels and, thus, to put a lid on runaway prices. Naimi said the kingdom was producing about 8.1 million barrels a day and said it would satisfy all customer demand for more oil, if requested. Many analysts put Saudi Arabia 's production at about 8.25 million barrels a day.

The weaker U.S. dollar is undermining the purchasing power of many OPEC states, which earn most of their revenue in dollars, the currency used to price most oil transactions. OPEC states import a lot of non-US goods, especially from Europe , that get pricier as the dollar sheds value.

The dollar weakness has come amid renewed concern about the health of US economic recovery. Financial investors have for months been buying oil futures to compensate against a weaker dollar. The dollar, although having lost about 20 cents I'm value against the euro in recent months to around $1.39, is still just over 10% stronger against

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