OPEC increases output limit to 30 million barrel-a-day

OPEC decided to increase its production ceiling to 30 million barrels a day, the first change in three years, moving the group’s supply target nearer to current output.

“We have an agreement to maintain the market in balance and we’re going to adjust the level of production of each country to open space for Libyan production,” Venezuelan Energy Minister Rafael Ramirez said after the Organization of Petroleum Exporting Countries meeting ended today in Vienna.

The group won’t set individual quotas for each member nation, a person with knowledge of OPEC policy said earlier today while the ministers were still in talks. The 30 million barrel-a-day limit is for all of OPEC’s 12 member nations, including Iraq and Libya, United Arab Emirates Oil Minister Mohamed al-Hamli said after the meeting ended.

OPEC is raising its quota to more closely match actual production while at the same time gauging the possibility of a slowing global economy and rising Libyan supply. Its last meeting in June broke up without consensus when six members including Iran and Venezuela opposed a formal push to pump more oil by Saudi Arabia and three other Gulf nations, who went ahead with an increase to make up for halted Libyan exports. OPEC will need to produce 30.1 million barrels a day next year to balance world supply and demand, its secretariat forecast yesterday.

World Economy Concern

“We are faced with the prospect of a world economy which could swing either way in the coming months,” Iranian Oil Minister Rostam Qasemi, who is also president of OPEC until the end of this year, said in an opening speech at OPEC’s Vienna headquarters for the 160th ministerial conference. “It could enter a welcome period of sustainable economic recovery or return to a new downturn or even recession.”

An OPEC press conference is scheduled for 2 p.m. local time. Saudi Arabian Oil Minister Ali al-Naimi declined to comment after the meeting ended. Earlier today he said he expected a “great agreement” within OPEC today. He had previously described OPEC’s June meeting at the worst ever.

OPEC last set a quota in December 2008 at a meeting in Oran, Algeria, when the group announced record supply cuts. The 11 members that are subject to limits last month pumped 2.81 million barrels a day more than the 24.845 million-barrel agreed ceiling, a Bloomberg survey showed. Iraq is not bound by quotas.

Group Production

All 12 OPEC members collectively produced 30.37 million barrels a day last month, according to OPEC’s own monthly report published yesterday. Excluding Iraq, the 11 nations previously subject to quotas pumped 27.69 million barrels a day, according to OPEC, which uses secondary sources, such as analysts and news agencies, for its survey.

Earlier today, Venezuela’s Ramirez had contradicted other OPEC by saying that the organization was not discussing a new higher production limit of 30 million barrels a day.

Brent crude for January delivery fell $1.11 to $108.39 a barrel as 1:11 p.m. London time in electronic trading on the London’s ICE Futures Europe exchange. Prices are up 14 percent this year.

The group’s 12 members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.

15 Comments

  1. Ham Guy

    More greedy shieks wanting to get richer.

    #1
  2. Mike

    I guess $3 gas was too low.

    #2
  3. saone

    I’m confused – if they are increasing production doesn’t that mean gas should be cheaper?

    #3
  4. tsujones

    if we could just get the margin pimps out of oil trading, we could work our way out of this depression. Of course they are too rich and therefore too powerful to be controlled.

    #4
  5. Maximusgary

    And the clown in the Whitehouse delays the decision on the Keystone Pipeline that would bring Canadian Oil Sands gas produced in North America to the United States thus reducing the need for imported oil. How much more of Obama can the country stand?

    #5
  6. Signal2Noise

    Maxi, you do realize that Canada is a different country and the therefore the OS crude IS imported, right? Additionally, it will amount to less than .5% of even US usage. I’d protect any fresh water aquifer in lieu of a pipeline that supplies a pittance of crude any day.

    #6
  7. ntangle

    06:52 a.m.
    OPEC limits production to 30 million barrels of oil a day

    Why would they make the front page headline sound like a reduction when in fact it’s an increase? At least that’s made clear in the first sentence of the article.

    #7
  8. jukester

    Wow, from the postings its pretty obvious that no-one takes the time to even read the articles! The FIRST PARAGRAPH says….”OPEC decided to increase its production ceiling to 30 million barrels a day, the first change in three years, moving the group’s supply target nearer to current output.”

    Come on folks! OPEC members don’t honor their own targets, and this is just unworthy window dressing, not real news! No impact whatsoever on gasoline prices, nor anything to do with Canadian oil export etc etc.

    #8
  9. Ted

    “as prices rose on speculative buying”
    ——————
    Oh but I thought Wall Street speculation doesn’t increase the price, that it was the “greedy oil companies manipulating” the prices.

    LOL

    #9
  10. bob

    They set limits all the time and NEVER abide by them.

    It is really rediculous if you think they will abide by any limits.
    They will produce exactly as much as they can sell.
    If they can sell 30 Million bbls they will produce it.
    If they can sell 50 Million bbls they will produce it.

    #10
  11. nspector

    You are very short sighted and brainwashed to be trying to lay this on the President. Oil from Canada is still imported dummy! Gasoline will never be cheaper no matter how much you drill here or whether you build the oil sands pipeline or not. We are already making more than we use. We have now become an exporter of refined products so like it or not you will be paying based on what the world market dictates. If they can sell gasoline product to England, or South Africa, or India , or China for $4 a gallon not including tax, then guess what you will have to pay to keep it here. More than you are now that’s for sure.

    #11
  12. drumb47

    More oil for speculators to bicker over. We, the consumer, will not benefit long term from the oil output increase. The speculators will make a way to benefit themselves if history is a indicator.

    #12
  13. Dweezil

    That should be enough for my truck.

    #13
  14. Steve Thompson

    Despite spending trillions of dollars, both state and publicly traded companies have been unable to increase the world’s reserve to production ratio over the past 15 to 20 years. Here is an article that discusses the issues that will appear in the world’s economy as oil scarcity looms:

    http://viableopposition.blogspot.com/2011/05/oil-scarcity-and-its-impact-on-global.html

    If the growth in the production rate of oil production drops by a persistent 1 percent annually, over a 20 year period, the price of oil is projected to rise by 200 percent.

    We need to stop looking at the short-term daily fluctuations and concentrate on the long-term supply/demand balance to tell us where the price of oil is headed.

    #14
  15. Recon dad

    The depth of ignorance regarding oil and its importance in our world is truly bottomless. It took our country years to findout we were at war with radical Islam and it looks like it will take as long to figure out we’re at war over O/G. The last two world wars were fought over oil and the winners of those wars were the ones with the oil.
    To have access to a large amount of oil from a friendly neighbor is something you cherish and utilize before it goes west.
    OPEC is between a rock and a hard place as far as controlling production is concerned. They know if the price get too high it will spur drilling in places where production costs until now were prohibitive. I believe they would like to see the price lower and they expect Libya Iraq and others to cheat on quotas so expect the 30 mm bbl/d quota to be raised in the future.

    #15