In spite falling global oil prices, members of the Organization of the Petroleum Exporting Countries, OPEC, on Thursday resolved to maintain oil supply at current production quotas.
In the run up to the meeting, declining oil prices fuelled fears that members would decide to intervene in the market by cutting production in an attempt to halt the trend and ensure stability.
OPEC basket of 12 crude, which averaged above $100 per barrel at the beginning of the year, crashed to about $73.47 per barrel on Friday, November 14, triggering concerns among most oil producing countries, including Nigeria, which was forced to unfold a number of austerity measures in an attempt to stem continued slide.
While the trend recorded a marginal improvement to $76.70 per barrel on Monday, it fell again to $74.20 per barrel the following and $73.70 per barrel on Wednesday, a day before the OPEC meeting convened to attempt to find solutions to the crisis.
However, at the end of the 166th meeting of the conference, under the Chairmanship of outgoing President and Libyan Vice-Prime Minister for Corporations, Abdourhman Ataher Al-Ahirish, members resolved to maintain production quotas at the 30 million barrels per day (MBPD) level as agreed in December 2011.
A communique issued at the end of the meeting said after a review of the Secretary General’s report on global oil market outlook, particularly the supply/demand projections for the first, second, third and fourth quarters of 2015, members agreed not to tamper with the production quotas in the interest of restoring market equilibrium.
Giving emphasis on the first half of the year, members also considered forecasts for the world economic outlook, noting the slow and uneven recovery of the global economy, with growth forecast at 3.2 percent for the remaining period of 2014, and 3.6 per cent for 2015.
The communique noted that though world oil demand was forecast to increase during the year 2015, it would be offset by the projected increase of about 1.36 MBPD supply by non-OPEC members to the market.
The group noted that there was no need to raise production quotas as the increase in oil and product stock levels in Organisation of Economic Cooperation and Development (OECD) countries, which are above the five-year average, coupled with the on-going rise in non-OECD supply inventories, were indications of an extremely well-supplied market.
On concerns over the rapidly declining oil prices in recent months, the Conference agreed that stable oil prices at a level that was not affecting global economic growth, while allowing producers to earn enough income to invest to meet future demand, were vital for world economic wellbeing.
While resolving to leave production at the 2011 levels, members gave their commitment to respond to developments capable of adversely impacting on the maintenance of an orderly and balanced global oil market.
Members who also resolved to be vigilant over market trend given the uncertainties and risks associated with future developments in the world economy, directed the Secretariat to continue to monitor supply and demand, as well as other non-fundamental factors such as speculative activity capacity of impacting price at the market.
Meanwhile, the communique revealed that Head of the Nigerian delegation and Minister of Petroleum Resources, Mrs. Alison-Madueke, who was elected the new President of the OPEC Conference would assume office from January 1, 2015, for one year.
During her tenure, Minister of Energy and Industry of Qatar and Head of its Delegation, Mohammed Bin Saleh Al Sada, was serve as Alternate President, for the same period.
Venezuelan Governor for OPEC, Bernard Mommer, was appointed as Chairman of the Board of Governors for the year 2015, while Ahmed Messili, Algerian Governor for OPEC, would serve as Alternate Chairman for the same period.
The tenure of the Secretary General of the group, Abdalla El-Badri was extended for a further period of six months, until December 31, 2015.
The next ordinary meeting of the group was scheduled for June 5, 2015 in Vienna, Austria, after the OPEC International Seminar on “Petroleum: An Engine for Development.”