OPEC Keeps Oil Output Same for 2013
OPEC oil exporters, basking in the market's equilibrium, agreed to leave output policy unchanged on Friday as oil held around the group's preferred level of $100 a barrel.
The Organization of the Petroleum Exporting Countries will retain its 30 million barrels per day (bpd) production target for the rest of this year, said Venezuelan Oil Minister Rafael Ramirez, after a swift meeting at OPEC headquarters.
The group is due to gather again on December 4.
Saudi Arabia's Oil Minister Ali al-Naimi had set the stage ahead of the meeting for an easy deal, saying world oil markets were in "good shape" and balanced.
That may be the case for now. But OPEC has little room to pump more oil due to the U.S. oil boom that has sparked competition for marketshare in Asia and set off a rivalry between its top two producers Saudi Arabia and Iraq.
A year ago, OPEC dismissed the threat of shale oil, but it's now a live topic within the 12-member group.
Gulf producers, led by OPEC heavyweight Saudi Arabia, think that OPEC will still be able to pump at least 30 million bpd, provided U.S. shale grows at a moderate pace.
"This is not the first time new sources of oil are discovered, don't forget history," said the influential Saudi oil minister. "There was oil from the North Sea and Brazil, so why is there so much talk about shale oil now?"
Despite growing supply, Brent crude is comfortably above $100 a barrel, well below the $125 that rang alarms in major consumer countries last year.
But oil above $100 has also freed U.S. shale oil in North Dakota and Texas - which competes with OPEC crude of similar, light quality from Nigeria and Algeria, rather than heavier Saudi output.
Nigeria, along with Algeria, has already felt pressured by the U.S. oil boom, losing ground in its most lucrative export market and diverting sales to Asia.
Iraq is also fighting for more Asian market share, competing with regional rival Saudi Arabia. But Iraq's production and exports are not growing as swiftly as hoped due to myriad infrastructure and logistical hurdles.
Oil Minister Abdul Kareem Luaibi expects the country's oilfields to ramp up to about 3.5 million bpd by the end of the year, up 400,000 bpd on current rates.
When OPEC last met in December, he expected average production of 3.7 million bpd for this year. The more modest growth has relieved concern among core Gulf producers that Baghdad would capture their market share in Asia.
The group will choose its next secretary general when it meets again in December, said the Saudi oil minister.
OPEC's choice of a new secretary general has stalled on competing candidates from Iran, Iraq and Saudi Arabia. Friday's meeting will merely approve the criteria for prospective candidates to come forward.