The 167th Meeting of the Conference of the Organization of the Petroleum Exporting Countries (OPEC) was held in Vienna, Austria, on Friday, 5th June 2015, where it was decided the oil production of the member countries would be kept at 30 million barrels per day ceiling.
“Member Countries, in agreeing to this decision, confirmed their commitment to a stable and balanced oil market, with prices at levels that are suitable for both producers and consumers. Nonetheless, the Conference stressed that, given the current market uncertainties, the Secretariat should continue to closely monitor developments in the coming months,” OPEC said in a statement.
Since OPEC’s last meeting in November 2014, prices fell from $77 per barrel to around $45 in January, somewhat recovering since.
Introducing the meeting, Mohammed Bin Saleh Al-Sada, Qatar’s Minister of Energy and Industry and Alternate President of the OPEC Conference said:
“It should be stressed that we do not believe that actual market fundamentals warranted the almost 60 per cent fall in prices that the market witnessed between June 2014 and January 2015. It is evident that speculators played some role in this fall.”
Since the slump of oil prices in mid-June 2014 from around $115 per barrel due to oversupply caused by U.S. production, OPEC has unexpectedly decided to keep pumping oil, in contrast with previous downfalls when the cartel would curb production in order to balance the prices.
It has been said that the reason for this was a boost in production from shale reserves in the U.S., with OPEC looking to keep the market share and press the high-cost shale producers in the U.S.
Ahead of the meeting Mohammed Bin Saleh Al-Sada said: “In terms of oil supply, non-OPEC countries will see much lower levels of production growth in 2015 than in previous years. In fact, expected non-OPEC supply growth this year is just below 700,000 barrels per day, which is only around one-third of the growth witnessed in 2014. In North America, US tight oil and Canadian oil sands are anticipated to see lower growth following recent strong declines in rig counts.
“All this points to a more balanced market in the second half of 2015, with current estimates for OPEC crude demand at 30.3 million barrels per day in the third quarter, and 30.7 million barrels per day in the fourth quarter.”
Of course, stability will be of paramount importance for the industry in the years ahead, given the need for investments in capacity expansion to make sure the world has enough supply to meet expected future demand.”
OPEC’s next meeting is scheduled for Friday, 4th December, 2015, in Vienna, Austria.
Offshore Energy Today Staff