Speculations are high that the Organization of Petroleum Exporting Countries may urge its members to comply with production limits when it meets today in Vienna to maintain crude prices around $60 a barrel. However, the organization’s ministerial monitoring committee has been seeking compliance with agreements at the group’s last two meetings to lower supplies by 1.7 million barrels a day. In the meanwhile, ahead of the meeting, comments by the ministers of Nigeria and Kuwait reflected satisfaction on the part of the organization.
OPEC that has reduced production targets to compensate for a predicted post-winter lull in heating oil demand is expected to decide production policy for coming months. The group is scheduled to meet in June again to decide future course of production. At the sidelines of the meeting, Kuwait’s Sheikh Ali Jarrah had indicated that prices between $50 and $60 a barrel for the OPEC basket of crude are acceptable for both consumers and producers.
However, Bllomberg has reported Jason Schenker, an economist at Wachovia Corp, in Charlotte, North Carolina, saying, ‘This meeting is not about cutting production but about the possibility of increasing production when summer driving season will affect demand. We will end up with crude oil prices in the upper range of $60 to $65 a barrel in the second and third quarter.’
On the eve of the meeting OPEC president Mohammed al-Hamli said that global oil demand this year seems to be healthy and expressed contentment with member compliance to previously decided production cuts. He further said that the organization was closely monitoring inventories that remained higher than average.
