OPEC to Hold Quota After Oil Reaches $75 Saudi Target
OPEC's success in more than doubling oil prices since a five-year low in December will probably persuade ministers to maintain production quotas after this week's meeting, Bloomberg reported.
Reducing shipments beyond record cutbacks last year would endanger the global economic recovery, the Organization of Petroleum Exporting Countries' president said last week. Oil rose to $75 a barrel on Aug. 25, the price Saudi Arabian King Abdullah says is fair for consumers and producers.
"OPEC countries will be pleased by the price, which they couldn't have anticipated back in January," said Edward Morse, the head of economic research at LCM Commodities LLC in New York. "They won't seriously consider deepening or extending the cuts at this stage. OPEC has taken a lot of oil out of the market, and it's going to clear the market up."
Ministers from Kuwait, Iran, Libya, Qatar and Iraq have in the past three weeks made similar comments to OPEC President Jose Maria Botelho de Vasconcelos, signaling they support existing quotas. The group won't change output at the Vienna meeting, Agence France-Presse reported yesterday, citing comments by Iran's OPEC Governor Mohammad Ali Khatibi.
All the 26 analysts surveyed by Bloomberg News predicted four days ago the group will maintain its target at 24.845 million barrels a day at the Sept. 9 meeting in the Austrian capital. OPEC supplies about 40 percent of the world's oil.
Crude oil for October delivery was trading at $68.08 a barrel on the New York Mercantile Exchange at 11:23 a.m. in Singapore, recovering from a five-year low of $32.40 in December.