Iraqi engineers at the Naher al-Umran gas refinery, near the southern city of Basra, on July 17, 2009
Iraqi engineers at the Naher al-Umran gas refinery, near the southern city of Basra, on July 17, 2009. Iraq has indicated that OPEC should maintain its oil production ceiling at this week's output meeting in Vienna, arguing that it was wary of damaging the fragile global economy by cutting output which would raise prices. © Essam -al-Sudani - AFP/File
Iraqi engineers at the Naher al-Umran gas refinery, near the southern city of Basra, on July 17, 2009
Roland Jackson, AFP
Last updated: May 30, 2013

Iraq hints at steady OPEC output to help world economy

OPEC appears set to maintain its output ceiling after Venezuela suggested Thursday that there was agreement among member nations to keep the status quo, on the eve of the cartel's latest production meeting.

"We are all in agreement to maintain the 30 million (barrels per day) production total, even if some countries are overproducing," said Venezuelan Energy Minister Rafael Ramirez, adding that the 12-nation grouping would seek to defend the key price level of $100 per barrel.

The comments appeared to mark a shift in tone in Venezuela's position, after the Latin American nation had indicated earlier in the week that it was open to an output reduction.

"Fundamentally, (Venezuela's position) is maintaining a minimum price level of $100 per barrel. This is an implicit agreement of all OPEC countries, benefitting all countries, and there is a consensus on that," Ramirez said.

Analysts expect that OPEC will leave its oil output ceiling at 30 million barrels per day, where it has stood since the end of 2011, despite actual output running above the official target.

Iraq had also earlier indicated that OPEC should maintain its ceiling, arguing it was wary of damaging the fragile global economy by cutting output which would raise crude prices.

"In general, OPEC targets -- in making the market well supplied -- are met these days and we do not want to cause a shock to the market which will affect the global economy," Iraqi Oil Minister Abdulkarim al-Luaybi told journalists.

He added that the oil market had been in a "stable" state in recent weeks, despite Wednesday's overnight slide that was rooted in worries about weak worldwide energy demand, particularly from China.

"The current market is in stable condition and this had been reflected in prices which show a good level of stability in the past few months," Luaybi said.

Angolan Oil Minister Jose Maria Botelho de Vasconcelos also added that the cartel should maintain output. When asked if there is any need for a change he replied: "I don't think so... The market is great, it's fine. Production is okay, the (oil) price is okay."

Most ministers from governments in the Organization of Petroleum Exporting Countries have expressed satisfaction with current benchmark Brent crude price of about $100 a barrel.

The cartel's members, which comprise nations from the Middle East and Africa and Latin America, enjoy rising revenues from higher crude prices, but they are also aware that high price levels hurt global growth.

Iran has meanwhile called for lower production this week in order to maintain and even boost crude oil price levels.

However, Ali al-Naimi, the oil minister for OPEC kingpin Saudi Arabia, hinted on Tuesday that the kingdom would prefer the cartel to maintain output, in line with market expectations.

Kuwait's OPEC governor Siham Abdulrazzak Razzouqi said she saw no calls for the group to change production, while the United Arab Emirates has stated that current oil price levels are "fair" and did not hurt growth.

OPEC accounts for some 35 percent of global oil, but its importance has been overshadowed in recent times by the prospect of booming shale production in the United States.

Questioned by journalists about the prospect of a sharp increase in US shale oil and gas output, and its overall impact on the market, Luaybi added: "Although it has some impact, it's not a significant impact on oil production or exports, and as you all might notice OPEC countries are all producing more oil than the agreed quota ceiling."

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