OPEC kept its production target unchanged for a second time this year as the group’s members judged prices are sufficiently high amid forecasts that supply will outpace demand for their crude in 2013.
“Everything will stay as it is,” Saudi Arabian Oil Minister Ali al-Naimi said in Vienna. “We respond to customer demand. Whatever the customers want, we will give them.”
The Organization of Petroleum Exporting Countries, which pumps 40 percent of the world’s oil, maintained its official quota at 30 million barrels a day, a level it now exceeds by about 1 million barrels a day. It failed to elect a new secretary-general. Brent crude, a benchmark contract for more than half the world’s oil, is heading for its highest-ever annual price, averaging $111.78 a barrel this year.
“Most member states in the exporting group are happy with the current market balance and price levels,” Andrey Kryuchenkov, an analyst at VTB Capital in London, said by e- mail. “The market remains well balanced with plentiful supplies ready to counter any short term disruptions or geopolitical risk jitters.”
OPEC’s 12 members are competing with a surge in shale oil output in the U.S., which last year bought 21 percent of group’s exports, at a time when the world economy may deteriorate yet again. Iran, formerly the group’s biggest producer after Saudi Arabia, faces tougher U.S. sanctions and a European Union ban on its crude because of the country’ nuclear program and has seen its output slip to fifth place within OPEC.
Production in Iraq is surging this year, helped by investment from foreign oil companies from BP Plc to Royal Dutch Shell Plc, while Libyan oil exports are recovering after last year’s armed conflict. High prices are handing OPEC members more than $1 trillion in annual revenue for a second straight year.
All 18 analysts surveyed by Bloomberg News before ministers met today at OPEC’s Vienna headquarters had predicted that the group would leave its production target unchanged. Analysts at Societe Generale SA and the London-based Centre for Global Energy Studies said OPEC will need to consider supply cuts next year to prevent prices falling. Brent crude rose 1.5 percent to $109.63 at 3:27 p.m. in London on the ICE Futures Europe exchange. The commodity will average $110 next year, according to the median forecast of 29 analysts tracked by Bloomberg.
OPEC set its current limit on Dec. 14, 2011, putting it into effect in January. The target, which doesn’t specify individual quotas for member countries, remained unchanged at the group’s previous meeting in June.