Azerbaijan, Baku, Nov. 26 / Trend A.Badlova /
OPEC will not change the quotas for oil production at a forthcoming meeting Dec.22, the Western analysts believes.
"Oil prices are at or above the levels that the cartel believes are appropriate,"the Energy Department Director at the Italian Liberal Research Center Bruno Leoni, Carlo Stagnaro, wrote Trend in an e-mail.
As a result of Wednesday Auctions, November 25, the price for January's futures contract for U.S. light crude WTI rose by $1.94 to $77.96 per barrel on the New York Mercantile Exchange. On the London Stock Exchange the price of January's futures for North Sea Brent crude oil rose by $1.98 to $78.44 per barrel.
The oil prices at $75-80 per barrel are "good and acceptable, Kuwaiti Oil Minister Sheikh Ahmad al-Abdullah al-Sabah said earlier. In his opinion, the cartel will maintain the current level of oil production at the meeting to be held in the Angolan capital Luanda.
At its last September meeting, OPEC left its oil production quotas unchanged. Today the level of oil production by 11 OPEC countries (excluding Iraq) is 24.85 million barrels per day. In 2008, OPEC decided to reduce oil production at 4.2 million barrels per day. Nevertheless, the cartel does not adhere to the quota. Under the OPEC report, in October production of 11 countries will be increased by 50,000 barrels per day to 26.52 million barrels per day.
Under the estimates of the U.S. Energy Information Administration (EIA), OPEC oil production for three quarters of 2009 totaled 29 million barrels a day, which is lower by 2.4 million barrels per day below compared to 2008.
According to Stagnaro, OPEC will not significantly affect the price dynamics with minor changes in production quotas.
"Moreover, since prices are probably incorporating a huge speculative component, I don't think that minor production adjustments might have significant impacts," Stagnaro said. "If OPEC wants to really change price patterns, either upwards or downwards, it should make a credible commitment to massive production cuts or boosts, which do not seem to be in today's agenda."
OPEC should be assessing whether the economy will rebound and the magnitude of such a rebound. This should ultimately be a factor in deciding to cut or increase output, analyst on energy policy at the U.S Cascade Policy Institute Todd Wynn believes.
"If the economy were to strongly rebound in the upcoming year then it may make some sense to meet extra oil demand with extra supply yet being cautious on the amount of supply to not depress prices significantly," the expert wrote Trend in an e-mail. "If the economy was expected to remain stagnant or decline further then it would make more sense to cut output."
Under the EIA forecasts, in 2010, OPEC's oil production will increase to 29.4 million barrels per day on the background of recovery in global demand.
OPEC, which owes about 40 percent of world oil supply, includes 12 countries: Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, UAE and Venezuela.
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