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OPEC not to raise output

DUBAI: The global oil cartel, Organisation of the Petroleum Exporting Countries (OPEC), has decided not to raise output beyond 31.5 million barrels per day.

This decision was taken on Wednesday at the organisation’s 146th ministerial meeting at Abu Dhabi, capital of the United Arab Emirates (UAE).

According to UAE’s official news agency WAM, most of the participating Ministers agreed that there was no need to increase production as the world’s oil markets were well supplied. OPEC countries meet nearly 40 per cent of worlds demand for oil.

Analysts point out that considerable pressure has been mounted on the OPEC to increase production, to cool oil prices. There are apprehensions that if oil prices are spiked beyond the current level, they can drive the international economy towards a recession.

Reacting to the decision, the price of a barrel of U.S. light sweet crude rose by $1.33 to touch $89.65. London Brent crude rose $1.37 a barrel to scale $90.90.

The Ministers will meet again in February to discuss the developments in the oil market.

“We’ve seen nothing yet to justify an increase or a decrease,” said Saudi Arabia’s Oil Minister Ali Al-Naimi prior to the meeting. Iran’s Gholamhossein Nozari endorsed Riyadh’s stance. “Our position is that demand and supply are balanced and there is no need to increase oil on the market,” he said. Officials from Qatar, Venezuela, Iran and Libya have been unenthusiastic about increasing supplies, unlike Ministers from Indonesia, Nigeria and Kuwait.

Iraqi Oil Minister Hussain Shehrestani said before the commencement of the meeting that his country was not proposing an increase in oil supplies.

He stressed that a possible recession in the U.S. economy was not weighing on the Iraqi decision. Iraq holds the world’s second largest proven oil reserves after Saudi Arabia.

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