The oil producers’ organisation OPEC has decided to maintain current production levels despite calls from the industry to push oil prices higher.
The Organisation of the Petroleum Exporting Countries took the decision to keep the “same” output target of 30 million barrels per day, Saudi Arabia’s Oil Minister Ali al-Naimi said in Vienna on Friday.
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He dismissed rumours of disagreement between poorer members, who are believed to have been pressing for a drop in production at the gathering of the 12-nation group in Austria’s capital.
“The ceiling is the same. You will be surprised how amicable the meeting was,” Naimi said after the meeting.
Angola, Ecuador, Iran, Iraq, and Venezuela had all appealed that the organisation, which produces one-third of global oil output, increases output for higher prices.
OPEC is pursuing its plan to maintain market share and exert pressure on high-cost US shale producers.
The decision leaves OPEC’s official collective target at a level where it has stood for more than three and a half years.
However, OPEC, which comprises nations from Africa, Latin America and the Middle East, is actually pumping 31.2 million billion barrels per day, due to increased supplies from Saudi Arabia and Iraq, according to International Energy Agency estimates.
Competition from shale
OPEC, which has traditionally defended price levels, switched strategy last November when it opted to leave output unchanged, despite a oil price collapse which cut revenues for its members.
In response to Friday’s decision, oil prices rebounded slightly, erasing earlier losses, in a move some analysts attributed to earlier speculation of a possible output increase.
Brent crude oil for delivery in July gained 33 cents to $62.36 per barrel in early afternoon London deals, while New York’s West Texas Intermediate (WTI) for the same month won 24 cents to $58.24.
Ministers had declared earlier they would be happier with prices between $75 and $80 a barrel to boost revenues and help balance their budgets.
The global oil market, beset with demand worries, oversupply and rising US shale output, dropped 60 percent between June 2014, when WTI crude stood at about $106 per barrel, and late January, when it hit a six-year low under $45.
Losses accelerated in November after OPEC’s change in policy.
However, analysts say the strategy has paid off as US shale oil producers have been squeezed and crude has recovered somewhat in recent months.