TEHRAN, (AFP) — Iran, OPEC’s second largest exporter, predicted on Sunday the cartel will maintain current oil output at its meeting next week, despite producers being unhappy with the prevailing price of crude.
“There is a feeling among OPEC oil ministers that the group wants to maintain current ouput levels,” Mohammad Ali Khatibi, Iran’s representative to OPEC, told AFP ahead of Wednesday’s meeting of the group in Vienna.
“I think it is unlikely we will see any noticeable change. Based on comments already made by OPEC ministers, the output ceiling will not change.”
OPEC, whose 12 members pump 40 percent of the world’s oil, agreed in late 2008 to remove a massive 4.2 million barrels per day (bpd) of output from the market in a bid to shore up crumbling prices.
The Organisation of Petroleum Exporting Countries official daily quota has stood at 24.84 bpd since January, but despite some signs of an economic recovery world energy demand still remains weak.
A vicious global economic downturn has brought down demand for energy, dragging crude prices from record highs of above 147 dollars in July 2008 to 32 dollars in December. They have since recovered to around 70 dollars a barrel.
The New York benchmark oil price for light sweet crude for October delivery stood at 68.02 dollars at Friday’s close.
The OPEC members worst hit are those whose economies are highly dependent on oil exports, and Iran is no exception with 80 percent of its foreign earnings generated from oil sales.
Anlysts say that prices have picked up with tentative signs of a recovery in the world economy, but compliance with emergency cuts made last year to support prices has slipped.
Iran and Angola are seen as the main culprits in exceeding their quotas, analysts say.
“The current quota system should not undergo any changes,” Angola’s Oil Minister Jose Maria Botelho de Vasconcelos, current president of OPEC, said this week.
Cartel members have to steer a careful course by supporting prices in a way that does not alarm the market.
Khatibi said on Sunday OPEC members were unhappy with the current oil price.
“A good price is one when all producers, consumers and investors are relatively satisfied. As far as I know, producers are unsatisfied and they believe the price should be higher,” he said.
“Although prices are around 70 dollars a barrel, we have to see how much 70 dollars is worth as the value of dollar has decreased,” he said, adding that the oil market was heading towards stability but had not yet arrived.
However, analysts say most OPEC member countries are satisfied with prices in the range of 70 to 80 dollars, enough to fund investment in future production, despite calls from Iran and Venezuela to push them higher.
“At 70 dollars there is no pressure to lower production. Everyone is earning well. There is no pressure to lift production either,” Frederic Lasserre at French bank Societe Generale said.
“Demand has not really recovered,” including in the key energy-hungry Chinese market, he added.