June 14 (Bloomberg) -- OPEC will probably maintain its production ceiling as concern that global growth is shrinking outweighs calls for supply cuts to stem sliding crude prices, six of the group’s 12 oil ministers said.
Ministers from Ecuador, Iran, Venezuela, Algeria, Angola and Nigeria back a rollover of the group’s 30 million barrel-a- day limit when it meets in Vienna today. Kuwait expects the ceiling to be unchanged. While an increase to the Organization of Petroleum Exporting Countries by 500,000 to 1 million barrels a day would help Europe weather its economic slowdown, members such as Iran and Venezuela oppose such a move, two delegates who declined to be identified said yesterday.
Brent crude dropped 24 percent since March to $97.13 a barrel yesterday as OPEC’s biggest producer, Saudi Arabia, pumped near its highest in three decades. Europe has struggled to control a crisis that started in Greece at the end of 2009 and this month led to a bailout of banks in Spain, the region’s fourth-largest economy. The International Energy Agency cut its 2012 oil demand forecast yesterday by 100,000 barrels a day.
“In the present environment, raising the target would send out the wrong signal, as it would suggest that OPEC is not willing to step down the overproduction,” Eugen Weinberg, head of commodity research at Commerzbank AG in Frankfurt, said in a note yesterday. “This would risk a continued oversupply and a further drop in prices.”
‘Not so Positive’
Brent, a benchmark for more than half the world’s oil, rose as high as $128.40 a barrel on the London-based ICE Futures Europe exchange on March 1. The contract traded at $96.80 as of 2:42 p.m. local time.
Prospects for Europe’s economy are “not so positive” and will have an important role in determining oil market fundamentals in the short term, Saudi Arabian Oil Minister Ali al-Naimi said yesterday in Vienna.
“We’re still in a pretty fragile economic situation,” David Fyfe, head of the Paris-based IEA’s oil industry and markets division, said yesterday by phone. “We don’t necessarily view the market presently as oversupplied.”
OPEC is pumping 1.58 million barrels a day more than its target, according to a monthly report from the group’s secretariat that uses secondary sources such as analysts and news agencies for output estimates.
Saudi Arabia boosted production to 9.92 million barrels a day in May from 9.88 million barrels the previous month, according to OPEC estimates. The kingdom said it had cut production to 9.8 million from 10.1 million barrels in April.