Opec Expected to Hold Onto 30 Million Barrel-Per-Day Production Ceiling
Opec Expected to Hold Onto 30 Million Barrel-Per-Day Production CeilingReuters

The Organization of Petroleum Exporting Countries (Opec), whose dozen member nations together supply almost a third of the world's crude, is expected to hold on to its output target of 30 million barrels per day when it meets on 11 June in Vienna.

"I don't see anything changing in terms of the 30 million barrels-per-day target," an unnamed OPEC source told Reuters. "It should be a fairly relaxed meeting."

Opec's output is in line with the target and the cartel seems satisfied with existing crude oil prices, which have hovered above $100 this year.

However, energy market watchers believe Opec could find it tough going to meet its targets. It depends on a range of variable such as, an easing of sanctions on Iran to allow the Islamic republic to export more crude, a recovery in output from crisis-struck Libya and a continuation of Iraqi oil export growth.

In addition, America's shale oil boom could eat into the cartel's market share 2015 onwards, probably leaving hardly any room for Opec to raise its output target in 2015.

Iran, Opec's second-largest producer before being beaten by Iraq in 2012, can boost output by some 600,000 bpd a few months after a lifting of sanctions, reported Reuters. The International Energy Agency's (IEA) monthly report in April suggested Iran was exporting some 1.65m bpd, exceeding the one million bpd limit imposed by world powers in a temporary agreement.

Elsewhere, around 10 months of protests at oilfields and export terminals in Libya has pulled down oil production to around 200,000 bpd from a pre-crisis high of 1.4 million bpd. Separatists have seized and occupied ports in the country's east while a wave of protests has halted production at a number of key oil facilities.

In Iraq, a recently opened export terminal in the south has boosted capacity by 800,000 bpd.

"It should be a very quick meeting," said Bill Farren-Price, head of energy consultancy Petroleum Policy Intelligence, of Opec's meeting.

"Prices are very stable and in a comfortable place ... China has been importing more crude than expected ... and the Ukraine crisis has helped keep the price underpinned," Farren-Price told AFP.