OPEC Maintains Status Quo as Oil Rally Brings New-Found Harmony
Source: Bloomberg
OPEC will stick to its policy of unfettered production after members failed to agree on a new output ceiling, but ministers were united in their optimism that global oil markets are improving.
While crude prices dipped after Thursday’s meeting, there was little of the rancor that punctuated last December’s summit. The group was also able to appoint a new secretary-general -- Nigeria’s Mohammed Barkindo -- something it couldn’t agree on last year.
All members see the same market fundamentals and have been “highly cooperative,” new Saudi Oil Minister Khalid Al-Falih told reporters in Vienna. Iran’s Bijan Namdar Zanganeh reported “very good unity,” while his Nigerian counterpart said relations had improved “substantially” and even Venezuela -- a strong supporter of freezing output -- said the meeting was “very positive.”
Saudi Arabia had floated the idea of restoring a group production ceiling though members decided it wasn’t necessary at this stage. OPEC needs more time to come up with an output cap, outgoing Secretary-General Abdalla El-Badri said after the meeting, adding that it’s hard to find a target when Iranian production is rising and significant Libyan volumes are halted.
Read more: http://www.bloomberg.com/news/articles/2016-06-02/opec-said-to-keep-status-quo-after-failing-to-agree-output-limit
