OPEC output ceiling unlikely to be kept

Photo: OPEC output ceiling unlikely to be kept / Iran

Dalga Khatinoglu, Trend Iran News Service Chief

OPEC members agreed to keep a 30mbpd crude oil output ceiling during the 152nd ministerial meeting on Wednesday.

The 30mbpd quota was approved in December 2011, whilst the previous quota was 24.8mbpd, but neither last nor current quotas have been kept. For instance, during the Libya revolution, Saudi Arabia used its spare oil production capacity and the OPEC output increased to above 26mbpd (excepting Iraq), or during this summer 12 members increased oil output altogether to about 32mbpd, when the U.S and EU were preparing to put their oil sanctions on Iran into force.

Iraq, which had suffered with long term sanctions during Saddam Hussein's presidency and experienced a war, has increased its oil crude production by one million barrels during the past three years.

According to OPEC's latest monthly report published on Tuesday, Iraq's oil output reached 3.174mbpd, 509, 000 barrels above last year's output. Baghdad aims at a 3.7 million barrels oil production in 2013 and raising this volume to 4.2 million in 2015.

Of course, regarding the lack of a quota limit to Iraq and the fact that the global oil demand and price balance the output after all, agreeing on a certain ceiling number does not mean members are obliged to keep that level.

OPEC's crude price for 2012 was averaging $109.7/b, $2.3 more than 2011. Now this figure is around $104.8/b, a figure that satisfies all members.

OPEC said the cartel's oil output has decreased from 31.224mbpd in 1Q12 to 30.781mbpd in November. This contraction does not mean members' decision to keep a ceiling level, but mostly because of Iran's falling oil production by 708, 000 barrels during the aforementioned period as well as members' attempts to curb a decrease of oil crude prices.

According the IEA, the global oil demand for the current year was 89.7mbpd, 800, 000 barrels more than 2011 and it's predicted increase is the same volume for next year.

On the other hand, U.S. oil production has increased by 900, 000 barrels per day during 2011-2012 and OPEC assessed that the demand for 12 members' oil output for 2013 will stand at 29.7mbpd, a million barrels less than the current level. To prevent more decrease in global oil prices, members may continue to drop oil output a little more, but not in such a substantial volume to fall to 30mbpd.

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