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OPEC keeps oil taps fully open

Friday, June 05, 2015 - 02:06

OPEC sticks to its policy of unconstrained oil output for another six months, despite worries that crude prices could lurch lower as some members such as Iran look to ramp up exports. David Pollard reports.

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OPEC. The oil producers' top table. But one where change is, right now, not on the menu. OPEC conference president was Qatar's oil minister, Mohammed Al-Sada. (SOUNDBITE) (English) QATAR'S OIL MINISTER, MOHAMMED AL-SADA, SAYING: ''Both the demand and the supply are of a healthy nature trend. With this, the OPEC unanimously to keep the ceiling which we previously agreed on of 30 million barrels a day.'' An expected decision - even if some industry watchers saw reasons for change. Like a global glut in supply. Prices collapsed after Saudi Arabia and its Gulf allies embarked on a policy of protecting market share rather than price, last November. Though they've recovered by a third after hitting a six-year low of 45 dollars a barrel. And - a related concern - lower investment. Earlier, Al-Sada told the meeting some oil companies had reduced expenditure by a third or more. Though that too could recover, says oil industry expert, Jason Schenker. 4229 (SOUNDBITE) (English) OIL INDUSTRY EXPERT, JASON SCHENKER, SAYING: "I don't necessarily think that these prices will remain this low for a long period of time and as prices rise, which I think will happen as the global economy recovers. I think you're going to see investment come back in this space." As for prices: the Vienna summit saw some delegates talking of a new 'fair price'. Brent Crude is currently at 62 to 63 dollars. Iraq, Angola and Venezuela are among those who reckon 75 to 80 dollars would be equitable. Iran too. Hopeful no doubt of bringing its supplies back to market - if Western sanctions are lifted. Its oil minister is Bijan Zanganeh. (SOUNDBITE) (English) IRAN'S OIL MINISTER, BIJAN ZANGANEH, SAYING: "Immediately, it means during one or two months, we can increase half a million, and during six or seven months we will increase it to 1 million barrel, our export." Oil prices rose on the OPEC decision, but US crude was still on track for its first weekly decline since March. A 75 dollars target still seen by some as a tall order.

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OPEC keeps oil taps fully open

Friday, June 05, 2015 - 02:06