Rolling in it

Rolling in it

Opec oil ministers are happy with oil prices around $75 a barrel. Of course they are.

December 6, 2009 12:18 by Dana El Baltaji

Opec oil ministers will not change the cartel’s production target when they meet on December 22 in Angola as oil prices globally have remained around $75 a barrel, Saudi Arabian Oil Minister Ali al-Naimi told Saudi-owned al-Hayat newspaper.

“Nothing will happen, no change in production as oil prices are at the desired positions and markets are calm,” Naimi said on the sidelines of a conference in Cairo.

On Saturday, the oil minister said oil prices were “perfect” for both producing and consuming nations worldwide. “The market is stable right now, volatility is at a minimum,” he said.

Opec has maintained its production output throughout 2009 after cutting supplies in December 2008 by an unprecedented 4.2 million barrels per day compared to September 2008; although in October 2009, the cartel – excluding Iraq, which is not subject to quotas – produced 26.5 million barrels a day, 1.5 million per day over its target, according to an Opec report.

In October, oil prices breached the $80 a barrel mark, prompting analysts to question if the rally was founded on solid market principles or temporary positive sentiment. JCB Energy analyst David Wech said in a research note: “We see little support for the rally, which is now eight days old, and think that at some point Opec spare capacity of about 6 million barrels and massive on and offshore stocks will trigger a correction phase.”

OPEC Secretary-General Abdullah al-Badri also noted at the time that oil prices were “a bit high.”

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Tags: IMF, oil, opec, price, Saudi Arabian Oil Minister Ali al-Naimi