Baku. 5 June. REPORT.AZ/ Oil group OPEC agreed to stick by its policy of unconstrained output for another six months on Friday, setting aside warnings of a second lurch lower in prices as some members such as Iran look to ramp up exports.
Report informs, OPEC output has exceeded the group's 30 million bpd ceiling for most of the past year, reaching 31.2 million bpd in May, its highest in three years, according to a Reuters survey. But there was little interest in adjusting that limit this week, as some analysts had suggested might happen.
Notably absent from this week's agenda were efforts to push for output constraints - even from hawks such as Venezuela, which faces deepening budget woes at prices below $100 per barrel.
With oil prices having rebounded by more than a third after hitting a six-year low of $45 a barrel in January, officials meeting in Vienna saw little reason to tinker with a strategy that seems to have resurrected moribund growth in world oil consumption and put a damper on the U.S. shale boom.
Naimi, emerging from the talks, said he was happy with the decision. He told reporters ahead of the meeting that he was confident production from marginal fields would fall even at current prices.
"The decision taken in November was the right one," United Arab Emirates energy minister Suhail bin Mohammed al-Mazroui said earlier, referring to OPEC's previous meeting. "It will take time for the markets to rebalance."
Friday's decision defers discussion of several tricky questions set to arise in the coming months as members such as Iran and Libya prepare to reopen the taps after years of diminished production.
Iranian oil minister Bijan Zanganeh had promised to press the group for assurances that other members will give Tehran room to add as much as 1 million barrels per day (bpd) of supply once Western sanctions are eased. But most delegates had seen little reason for Tehran to pick a fight now.
"When the production comes, this matter will settle itself," one OPEC delegate says. That may not occur until 2016, according to many analysts who question how quickly Tehran will win relief from sanctions and be allowed to sell more crude.
The U.S. tight oil industry has been more resilient than many had expected, with falling costs helping sustain the revolution and possibly setting up another downward spiral.
The markets are moving in OPEC's favour," said Dr. Gary Ross, executive chairman of PIRA Energy Group. "Prices are stimulating robust demand growth and slowing capex. This was the objective of the Saudi strategy and it's working."
"Balances show we are oversupplied and OPEC is in pedal-to-the-metal mode," said Bob McNally, founder and president of Washington-based consultancy The Rapidan Group. He said Brent crude could fall back to $50 a barrel.
In other business, OPEC appeared set to grant Indonesia's request to rejoin the group after a more than six-year hiatus in its membership. Now a net importer of oil, Indonesia hopes to foster better dialogue between producers and consumers.