The Conference of the Organization of the Petroleum Exporting Countries (OPEC) convened in Vienna, Austria, on 31st of May 2013, under the Chairmanship of its Alternate President, HE Dr Abdel Bari Ali Al-Arousi, Minister of Oil and Gas of Libya and Head of its Delegation.
According to the official agenda, the Conference reviewed recent oil market developments, as presented by the Secretary General, in particular supply/demand projections, as well as the outlook for the second half of 2013, noting that the relative steadiness of prices during 2013 to-date was an indication that the market was adequately supplied, the periodic price fluctuations being a reflection of geopolitical tensions.
Geopolitical tension in the Middle East and Africa has kept the oil price at the $100 level and without it, if the price had been driven by fundamentals it would probably be closer to $75.
Most member states also expressed their support for $100 oil. Some, including Venezuela, stressed concern over excessive production by other members, with OPEC pumping about 1 million barrels a day more than the informal target.
Collectively, OPEC has a production ceiling level of 30mbpd but consistently manages to exceed this level. If members were asked to cut back, as individuals they probably wouldn’t but would carry on producing whatever they could sell. The only producer who can readily balance the market is Saudi Arabia and that is where any strength in OPEC is left.
OPEC has given itself six months now in which to consider who to appoint as the next Secretary General and whether or not to acknowledge the impact of oil and gas from shale.
On the question imposed by alfaenergy chairman, Mr John Hall, did OPEC feel that $100 per barrel was reasonable for consumers, the Secretary General Abdalla El Badri, naturally replied that if such countries were unhappy with the prices paid their respective Governments should reduce taxation levels on oil products because they make more money out of OPEC oil than OPEC does.
After carefully reviewing all of the topics discussed during the meeting, one would say nothing much has been said or done, however, the topics are challenging and it will be interesting to see how the things will further develop.
The Conference decided that its next Ordinary Meeting will convene in Vienna, Austria, on Wednesday, 4th of December 2013.