(Updates with analyst comment in seventh paragraph.)
Dec. 12 (Bloomberg) -- Kuwait’s oil minister said there is no need to change OPEC’s crude output or production quotas as the group’s ministers prepare to meet in Vienna on Dec. 14.
“I don’t think there is any need to change either production or quota because now the market is stable,” Mohammad al-Busairy told Bloomberg News as he left for Vienna from Kuwait. “Most of the countries in OPEC agree there is no need to change anything about the quota or the production.”
The Organization of Petroleum Exporting Countries will probably fail at the meeting in Vienna to set a target that more closely matches production, according to all but five of 26 traders and analysts surveyed by Bloomberg News Dec. 6-8. Instead, they are likely to stick with a three year-old ceiling that members exceeded by 11 percent in November.
The group failed to reach an agreement on quotas for the first time in at least 20 years at its June 8 meeting when a Saudi Arabia-backed proposal to boost output to make up for lost Libyan supply was rebuffed by Iran, Venezuela and four other countries. Six months later, there are uncertainties surrounding global oil demand amid signs that Europe’s debt crisis may drive the world into a recession.
The outlook for global economic growth is so clouded, the Paris-based International Energy Agency this year issued different forecasts for oil demand in 2012, based on alternative scenarios. In its most likely scenario, the world economy will expand by 3.9 percent, with oil consumption rising 1.5 percent to 90.5 million barrels a day, the IEA said Nov. 10. Should growth average 2.6 percent, demand for crude will increase by 0.3 percent, it said.
Saudi Arabia’s oil minister Ali al-Naimi, who said the world’s biggest crude producer pumped the most in at least three decades last month, signaled on Dec. 8 that there’s no pressure to agree on new targets. Asked in an interview in Durban, South Africa, whether OPEC needs to revise the group ceiling, he replied, “Who says?”
“I don’t expect a net change in group production at this meeting,” Jason Schenker, the president of Prestige Economics LLC in Austin, Texas, said today in an interview in Vienna. “I expect an ad hoc production-change dynamic to remain in place to respond to the economic downside risks through the next meeting in June.”
OPEC’s 12 members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.
--With assistance from Ayesha Daya in Vienna. Editors: Raj Rajendran, Rob Verdonck.
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