Will Opec have a happy new year?
According to the cartel, oil prices have increased considerably in the past year to reach “perfect” levels. But will 2010 be more profitable?
December 23, 2009 8:08 by Aarti Nagraj
Oil prices reached above $74 per barrel on Tuesday even as the Organization of the Petroleum Exporting Countries (Opec) agreed to keep production unchanged at least until March 2010.
Opec ministers have said that they are happy with the current oil prices; Saudi’s oil minister Ali al-Naimi said that they were “perfect” and that he would like to “keep it that way” in 2010. “Everyone needs this price: this is the future,” he said.
This is the fourth time this year that the group, which controls more than 40 percent of the world’s oil production, has left its output unchanged. Late last year, the body decided to reduce 4.2 million barrels a day from January 1 2009, since oil prices were close to $32 per barrel.
Although prices have doubled since then, many of the Opec members have not been complying with the production quotas. Earlier this month, the International Energy Agency (IEA) said that the compliance rate among the Opec members fell to 58 percent in November from 60 percent in October, with Iran and Angola violating their limits most.
Opec’s secretary general Abdulla el-Badri said that he would like the members to bring compliance to 75 percent, and Algerian oil minister Chakib Khelil told Bloomberg that said he would “like to see 100 percent compliance” with the output targets.