OPEC, Foreseeing No Glut, Keeps Oil Production Level Steady

Members of the Organization of the Petroleum Exporting Countries agreed on Wednesday to leave their combined daily quota for petroleum production at 30 million barrels, a decision that was expected to keep prices at their current steady and relatively high levels. Even though some analysts foresee challenges shaping up for the oil producers next year, OPEC officials, meeting in Vienna, saw no reason to make changes now, given the many uncertainties about the outlook for supply and demand.

“Production will remain at 30 million barrels per day,” the Kuwaiti oil minister, Mustafa Jassim Mohammad al-Shamali, who is presiding over the meeting, said in a television interview on OPEC’s website. “This is very reasonable for producers and consumers,” he said, noting that output would stay at that level until at least May.

The OPEC decision comes against the backdrop of the changing nature of Iran’s role in the oil market.

Iran, which recently struck an interim nuclear accord easing sanctions with the United States and other world powers, warned that it would increase production as quickly as possible once sanctions were lifted and would ignore OPEC restrictions. Bijan Namdar Zanganeh, the oil minister of Iran, told reporters that after sanctions were lifted it would raise production from 2.7 million barrels a day to Iran’s former level of four million barrels a day.

Iran is unlikely to be able to increase exports much over the next six months, and most experts think that rebuilding the Iranian oil industry will be a lengthy process. But Iran’s posture was a warning that OPEC’s future cohesion might be in jeopardy.

“They are laying down a marker for future negotiations that others will have to make room for them or suffer price cuts,” said Bhushan Bahree, an OPEC analyst at the research firm IHS Cera, who was in Vienna for the meeting.

The market seemed to consider the Iranian comments a sign of potentially heightened political tensions rather than of an imminent glut of supplies. United States crude rose about 1 percent to about $97 a barrel, while Brent, the international crude, fell slightly to about $112.50 a barrel.

In recent years, OPEC has not disclosed quotas or production ceilings for individual members. But the whole organization is supposed to adhere to a target of 30 million barrels a day, which is approximately the current output.

In practice, most members produce all they can, leaving Saudi Arabia, by far the largest producer and the key decision maker in OPEC, and its Gulf allies, Kuwait and the United Arab Emirates, to adjust supplies as needed without risking friction over changing individual ceilings. The other member countries are Algeria, Angola, Ecuador, Iran, Iraq, Libya, Nigeria, Qatar and Venezuela. Over all, it has been another easy year for the 12 OPEC members in terms of maintaining prices. Production in Libya and Nigeria has dwindled. That has allowed Saudi Arabia and the other Gulf countries to continue producing at high levels, without depressing prices.

As a result, prices have been remarkably steady and at historically high levels. Brent crude, the main international benchmark, has traded above $100 a barrel for all but a few days in 2013.

The implications for consumers — particularly automobile drivers in Europe and the United States — is that fuel prices, generally lower now than a year ago, are unlikely to change significantly anytime soon. In the United States, the average gasoline price on Tuesday was $3.24 a gallon, compared with $3.39 a year ago, according to Gregg Laskoski, an oil analyst at GasBuddy.com, a consumer website.

“OPEC is a reactive organization, and with oil prices at these levels there is no issue for them to react to,” said Seth Kleinman, an analyst at Citigroup who was also in Vienna.

But OPEC could face challenges going forward.

New output from Iraqi Kurdistan could add substantially to Iraq’s total exports. At the meeting, Iran appeared to be signaling, as Iraq has also argued, that it should be given a free pass by OPEC to increase production to make up for the revenues lost under sanctions.

“There is a serious tension between Saudi Arabia and both Iraq and Iran in terms of the potential for those countries to bring increasing volumes into the market and what that means for Saudi Arabia’s share,” said Richard Mallinson, an analyst at Energy Aspects, a research firm in London. OPEC, which produces about a third of world oil supplies, also risks being squeezed by rising production in countries outside the organization.

The United States, which is seeing a sharp growth in production from shale formations, is expected to add nearly one million barrels a day to its output of oil and other liquid fuels in 2014, after a similar increase this year. Other non-OPEC countries like Canada and Brazil are also raising production.

David L. Goldwyn, a former senior energy official at the State Department, said OPEC risked “significant erosion of market share as non-OPEC production rises.” He added that “the question is whether they are going to cede market share and elevate prices, or let prices drop and try to force out some of the high-cost oil” that is being produced in the United States. Drilling in shale formations, a big source of the increased American output, is relatively costly and could slow if prices fall, analysts say.

Eventually, analysts say, there could be a substantial fall in oil prices if the worries about disruptions ease. “A lot of people think that $90 per barrel to $100 per barrel is normal, which it is not — it is stubbornly high,” said Michael Lynch, president of Strategic Energy and Economic Research, a consulting firm. Mr. Lynch said that if Libya resumed its full production and a permanent agreement were reached on Iran’s nuclear program, prices could fall by $25 a barrel.

Fonte: nytimes.com