London: Organisation of Petroleum Exporting Countries (Opec), which supplies about 40 per cent of the world's crude, kept its production target unchanged at 30 million barrels a day, a decision that was widely anticipated.
The Opec reaffirmed the ceiling for a fifth consecutive meeting, Diezani Alison-Madueke, Nigeria's petroleum minister said after the event. The group forecasts demand for its crude of 30.4 million barrels a day in the coming six months, while its 12 members produced 29.6 million barrels a day in April, the organisation's data show.
Opec nations representing 94 per cent of the group's output said before the meeting that they were at ease with supply and demand in global oil markets. While the formal limit remains unchanged, the burden will fall to Saudi Arabia to increase output to meet higher demand in the second half as political turmoil constrains Libyan output and sanctions curb Iranian exports, according to Barclays, Societe Generale and Energy Aspects.
"A rollover is to be expected," Andrey Kryuchenkov, an analyst at VTB Capital in London, said by e-mail before the decision. "Most member states will be very comfortable with prices, while uncertainty over Libyan supplies gives some room" for countries including Saudi Arabia to produce more, he said.
The International Energy Agency (IEA), the Paris-based adviser to 29 nations, recommended on May 15 a "significant rise in Opec production" to meet its forecast of demand for the group's crude of 30.7 million barrels a day in the second half of the year. Oil inventories in advanced nations were at 2.62 billion barrels in April, the lowest for that month since 2008, the year Brent reached a record $147.50 a barrel, IEA data show.
In Libya, output has fallen to a tenth of pre-conflict capacity because of protests at oil fields and strikes at export terminals. Iran faces an end in July to relief from sanctions, which have reduced oil exports, if it cannot reach a broader deal on its nuclear programme.
"We don't need to worry about anything, this is the best time for the market," Ali al-Naimi, Saudi Arabia's oil minister, told journalists in a briefing before the meeting began. "Everything is good, stable and everyone is happy." The kingdom is able to raise production as high as 12.5 million barrels a day and sustain it there, he said.
Saudi Arabia produced 9.705 million barrels a day in May, a person with knowledge of the kingdom's output said on Wednesday.
Opec members will eventually need to discuss incorporating the return of halted output in Iran, Iraq, Nigeria and Libya, Barclays said in a report on May 16.
The 12-member Opec includes Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.
The 29.6 million April oil-production figure from opec is from data gathered from secondary sources.