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OPEC happy with oil price ahead of cartel meeting

Oil&Gas Materials 12 October 2010 16:04 (UTC +04:00)
The Organization of the Petroleum Exporting Countries (OPEC) said Tuesday that current oil prices satisfied both producers and consumers, indicating that the cartel's oil ministers will not change production limits at their meeting this week.
OPEC happy with oil price ahead of cartel meeting

The Organization of the Petroleum Exporting Countries (OPEC) said Tuesday that current oil prices satisfied both producers and consumers, indicating that the cartel's oil ministers will not change production limits at their meeting this week, DPA reported.

Crude oil has risen above 80 dollars this month, after staying mostly between 70 and 80 dollars since May.

"There is now a broad consensus in the market that crude oil prices around the current range have been accommodative in promoting adequate investment while at the same time supporting the economic recovery," OPEC said in its latest market report, referring to investments in oil production.

Analysts said the current price level was not damaging the global economy. "If it went over 90 dollars, it would hurt," said Johannes Benigni at JBC Energy in Vienna.

Although some of OPEC's 12 oil ministers have signalled ahead of their Thursday meeting that the production ceiling would not be changed, experts say that the group might increase output next year.

Oil reserves in industrialized countries are currently at a high level, corresponding to 61 days of consumption, but that figure could come down toward the 50-day mark some six months from now as demand picks up, said Jochen Hitzfeld, an analyst with Unicredit bank in Munich.

"If we come near that level, there will be pressure for OPEC to raise production," he said.

The cartel's 12 members pumped 29.1 million barrel per day (bpd) in September, 30.5 bpd less than in August. (One barrel equals 159 litres.)

Even if the organization expands its output next year, analysts said, it could do so without officially raising the output limit, which it already exceeds.

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