29 Mar 2024
Monday 14 December 2015 - 14:07
Story Code : 192363

OPEC fails to alter production ceiling after Iran pledges to boost output

Oil prices have hovered near $40 a barrel in recent weeks on ongoing concerns about the global oversupply of crude, which had sent prices plunging in late 2014.

Brent crude oil futures were last up 65 cents at $44.49 a barrel at 1100 GMT (4:30 p.m.in India), having fallen earlier this week to a low of $42.43, within cents of August's six-and-a-half-year trough.

On the ICE Futures Exchange in London, the January Brent contract were up 1.60% at $44.54 a barrel.

- Argues that Iran had no role in the oil price drop, which occurred because other OPEC members exceeded the production ceiling.

In some negative news for crude prices, it was reported today that OPEC nations chose to keep producing oil at the current high levels, effectively acknowledging their inability to push up crude prices.

"These developments indicate the onset of a more balanced market in 2016, with demand for OPEC crude expected to rise by 1.2 million barrels per day to average 30.8 million barrels per day for the year", he said

chose to postpone this decision to the next OPEC meeting until the picture becomes more clear for us to decide on a number", OPEC Secretary-General Abdullah al-Badri said during the press conference in Vienna after members held discussions behind closed doors for more than seven hours.

The Organisation of the Petroleum Exporting Countries was under pressure from some poorer members, including Venezuela and Algeria, to agree to slash output at its meeting in Vienna.

However, wealthier producers argue that cutting production at this time would result in further loss of market shares in North America, where demand for OPEC oil has been sharply reduced.

- Say that it doesn't appear that OPEC can change the low price situation in the short term and needs to come to a long term strategy.

Hirs said he suspects OPEC will stand pat, which would keep up pressure on high cost players, like USA shale producers, to pump less.

United States crude futures were up 55 cents at $41.63.

In a surprise, OPEC failed to reach an official decision Friday on how much oil to produce.

Iran won't accept any production curbs until it restored about 1 million barrels a day of output, Oil Minister Bijan Namdar Zanganeh said on Friday before sitting down with his OPEC counterparts.

Kachikwu acknowledged as much, telling reporters asking about Iran's return: "At the end of the day every country has a sovereign right to bring to the marketplace its resources".

By Waltonian
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