OPEC to Urge Members to Stick to Quotas

As oil ministers prepare to meet in Vienna Wednesday, there is little doubt that OPEC will keep production targets on hold.

Oil Barrels
Oil Barrels

The main issue on the agenda of the 156th meeting will be compliance. Eleven of the 12 countries subject to production quotas, following OPEC's supply cut in December 2008, have been steadily raising production above their targeted level.

Despite the rise in production, data from oil services firm Baker Hughes indicated that OPEC countries are increasing drilling at the fastest rate in two-and-a-half years.

"The communique from this meeting will encourage members to adhere to production quotas," Prestige Economics said in its monthly energy report, after a number of studies found that OPEC members could be pumping over 2 million barrels a day above set targets.

With oil hovering close to $80 a barrel, it is trading in a region that OPEC likes. Oil ministers from Libya, Iran, Ecuador, Qatar and Kuwait have already indicated that Wednesday's meeting will leave quotas as they stand.

But the rhetoric around the tricky issue of compliance will set the tone for OPEC's next meeting, where an increase in output could certainly be on the cards.