The Organization of Petroleum Exporting Countries has reaffirmed the quotas at every meeting since they were set in December 2008, even though the group is exceeding that limit by the equivalent of a supertanker of crude a day. OPEC, supplying about 40 percent of the world’s oil, set its official cap at 24.845 million barrels a day.
“OPEC has obviously been quite happy with the current price range,” said Mike Wittner, head of oil research at Societe Generale SA . “Later this year, OPEC will have to think about whether they are comfortable with higher prices.”
OPEC members excluding Iraq pumped 26.8 million barrels a day last month, 1.9 million more than the target, data compiled by Bloomberg show. Shipments will rise again this month, according to tanker-tracker Oil Movements.
Oil prices surged 78 percent last year as OPEC curtailed as much as 3.7 million barrels a day of output and the global economy started to emerge from its worst slump since World War II. Crude futures traded as high as $82.56 a barrel today on the New York Mercantile Exchange, up 3.7 percent this year.
‘Beautiful’
Current prices are “beautiful,” Saudi Arabian Oil Minister Ali al-Naimi told reporters before the start of today’s meeting. At OPEC’s last meeting in December 2009, he said prices between $70 and $80 a barrel are “perfect.” Angolan Oil Minister Jose Maria Botelho de Vasconcelos said yesterday that prices between $80 and $90 a barrel are good and $90 would be too high.
One minister, Algeria’s Chakib Khelil, said the group may have to raise production quotas later this year because of rising prices. There is a “50-50 chance” that output limits will be raised at a subsequent meeting in September, he told reporters yesterday.
“The world is going to need additional OPEC crude output,” said Wittner of Societe Generale. “We expect continued draw downs in inventories and rising prices assuming the global economic recovery continues.”
Too Much Oil
For now, OPEC said its own analysis shows it is pumping more oil than is needed. OPEC estimated in a March 10 report that its current production is 1.5 million barrels a day more than the demand for its crude in the second quarter, after analyzing non-member production and global consumption. In February, members complied with 53 percent of the record 4.2 million barrels a day cuts announced in 2008, OPEC data shows.
Nigeria and Angola are exceeding their quotas and have a standing request with OPEC to enlarge their entitlement. The organization typically avoids tackling such issues until it makes broader changes. The national quotas are not published on the group’s Web site.
OPEC plans to add 12 million barrels to its daily production capacity by 2015, equal to what Saudi Arabia can pump today. The gains would exceed the expected growth in demand, according to the International Energy Agency.
Goldman Sachs, Bank of America Merrill Lynch and Societe Generale SA forecast that demand for oil will recover, requiring new crude supply. Goldman Sachs sees crude reaching $96.50 a barrel within 12 months, while Societe Generale forecasts an average of $104 in 2012 and Merrill says prices may rise as high as $150 in 2014.
Production from the 11 OPEC members bound by quotas rose to 26.811 million barrels a day in February, the organization said in a March 10 report. Shipments will increase 0.9 percent by the end of the month, according to Oil Movements based in Halifax, England.
OPEC’s 12 members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. Iraq is exempt from production quotas.
-- With assistance from Mahmoud Kassem, Jonathan Tirone and Ayesha Daya in Vienna, and Alexander Kwiatowski, Rachel Graham and Brian Murphy in London. Editors: Mike Anderson, John Buckley.
“OPEC has obviously been quite happy with the current price range,” said Mike Wittner, head of oil research at Societe Generale SA . “Later this year, OPEC will have to think about whether they are comfortable with higher prices.”
OPEC members excluding Iraq pumped 26.8 million barrels a day last month, 1.9 million more than the target, data compiled by Bloomberg show. Shipments will rise again this month, according to tanker-tracker Oil Movements.
Oil prices surged 78 percent last year as OPEC curtailed as much as 3.7 million barrels a day of output and the global economy started to emerge from its worst slump since World War II. Crude futures traded as high as $82.56 a barrel today on the New York Mercantile Exchange, up 3.7 percent this year.
‘Beautiful’
Current prices are “beautiful,” Saudi Arabian Oil Minister Ali al-Naimi told reporters before the start of today’s meeting. At OPEC’s last meeting in December 2009, he said prices between $70 and $80 a barrel are “perfect.” Angolan Oil Minister Jose Maria Botelho de Vasconcelos said yesterday that prices between $80 and $90 a barrel are good and $90 would be too high.
One minister, Algeria’s Chakib Khelil, said the group may have to raise production quotas later this year because of rising prices. There is a “50-50 chance” that output limits will be raised at a subsequent meeting in September, he told reporters yesterday.
“The world is going to need additional OPEC crude output,” said Wittner of Societe Generale. “We expect continued draw downs in inventories and rising prices assuming the global economic recovery continues.”
Too Much Oil
For now, OPEC said its own analysis shows it is pumping more oil than is needed. OPEC estimated in a March 10 report that its current production is 1.5 million barrels a day more than the demand for its crude in the second quarter, after analyzing non-member production and global consumption. In February, members complied with 53 percent of the record 4.2 million barrels a day cuts announced in 2008, OPEC data shows.
Nigeria and Angola are exceeding their quotas and have a standing request with OPEC to enlarge their entitlement. The organization typically avoids tackling such issues until it makes broader changes. The national quotas are not published on the group’s Web site.
OPEC plans to add 12 million barrels to its daily production capacity by 2015, equal to what Saudi Arabia can pump today. The gains would exceed the expected growth in demand, according to the International Energy Agency.
Goldman Sachs, Bank of America Merrill Lynch and Societe Generale SA forecast that demand for oil will recover, requiring new crude supply. Goldman Sachs sees crude reaching $96.50 a barrel within 12 months, while Societe Generale forecasts an average of $104 in 2012 and Merrill says prices may rise as high as $150 in 2014.
Production from the 11 OPEC members bound by quotas rose to 26.811 million barrels a day in February, the organization said in a March 10 report. Shipments will increase 0.9 percent by the end of the month, according to Oil Movements based in Halifax, England.
OPEC’s 12 members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. Iraq is exempt from production quotas.
-- With assistance from Mahmoud Kassem, Jonathan Tirone and Ayesha Daya in Vienna, and Alexander Kwiatowski, Rachel Graham and Brian Murphy in London. Editors: Mike Anderson, John Buckley.
