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VIENNA: Iraq indicated on Thursday that Organisation of Petroleum Exporting Countries (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.
“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 reporters in the Austrian capital, on the eve of the meeting.
He added that the oil market had been in a “stable” state in recent weeks, despite an overnight slide on Wednesday 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. We are looking to increase exports and tighten our commercial ties with our customers.”
Ministers from governments in the OPEC have expressed satisfaction with current benchmark Brent crude price of about $100 a barrel. Brent was trading at $101.87 in London on Thursday.
While the cartel's members, which comprise nations from the Middle East, Africa and Latin America, boost their incomes the higher crude prices grow, they are mindful of the fact that oil deemed too expensive risks crippling fragile global economic growth. The 12-nation OPEC accounts for some 35 per cent of global oil, but its importance has been overshadowed in recent times by the prospect of booming shale production in the United States.
Meanwhile non-OPEC members Russia and Norway are rival major sources of crude oil for countries worldwide.
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:
“The US shale oil production increase – 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.”
Most analysts expect OPEC will leave its collective oil production ceiling at 30 million barrels per day (mbpd), where it has stood since the end of 2011, despite actual output running above the official target.
Hawkish members Iran and Venezuela have already declared that they would be open to an oil production cut in order to maintain and even boost crude price levels.
However, Kuwait's OPEC governor Siham Abdulrazzak Razzouqi told reporters earlier on Thursday that she saw no calls for the group to change its current production levels.
The United Arab Emirates has also said that current price levels are “convenient and fair” and did not hurt growth.
OPEC kingpin Saudi Arabia had meanwhile hinted that the kingdom would prefer the cartel to maintain the ceiling in line with market expectations.
Influential oil minister Ali al-Naimi, who arrived in Vienna on Tuesday, told Saudi state news agency SPA that “international oil market is stable and balanced”.
He added that “prices are at a level suitable for producing and consuming nations and to the oil industry”.
Luaybi added on Thursday that OPEC ministers will also discuss the selection criteria for a new secretary-general on Friday, and repeated his backing for Iraq's candidate, Thamir Ghadhban.
Saudi Arabia has been battling against both Iraq and Iran to have its candidate succeed Libya's Abdullah El-Badri.