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Opec holds output steady

December 13, 2012

VIENNA,  Dec 12: Opec on Wednesday maintained its oil output ceiling but had to reappoint Secretary-General Abdullah El-Badri to lead the cartel for another year after members failed to agree on a new leader.

As expected by markets, the Organisation of Petroleum Exporting Countries kept its oil production ceiling at 30 million barrels per day (mbpd), with crude prices remaining at high levels ahead of an expected drop in OPEC demand next year.

“We will hold” output, Saudi Arabian Oil Minister Ali al-Naimi said after a ministerial meeting in Vienna, home to Opecs headquarters.

The ministers also voted to keep Libyan El-Badri on for one more year after the cartel’s 12 members failed to agree on a replacement for the secretary-general who had been due to stand down at the end of 2012 after two three-year terms.

“We extended (by) one year for the secretary-general,” Naimi told journalists.

“We have an experienced secretary-general in position. Extending it one year is a very, very, very good decision,” he went on. The new term begins on January 1.

The world’s biggest oil exporter Saudi Arabia had been battling against Iraq and political foe Iran to have its candidate succeed El-Badri, who has steered the cartel through the financial crisis as its secretary-general since 2007.

“The secretary-general sets the tone and leads the organisation as we go forward,” Nigerian Petroleum Minister Diezani Alison-Madueke had told reporters ahead of the decision to keep El-Badri.

Opec — which produces more than one third of the world’s oil — had in June already failed to reach a unanimous decision among its members over who should replace the Libyan.

El-Badri said of his re-appointment: “I enjoy my tenure here in the Secretariat. I try to work my best to serve our member countries.” Independent energy market analyst Karin Kneissl said keeping him on had been “the most pragmatic decision” Opec could agree on.

“The secretary-general definitely has a role as a host, as a coordinator, but the secretariat as such can always function without a fully fledged practical agreement on who will take the post,” she told AFP.

Oil rises In London, the oil market rose on Wednesday on hopes of more Federal Reserve stimulus measures and after Opec held its output ceiling, but price gains were capped by news of the soaring US energy stockpiles, dealers said.

Brent North Sea crude for January rallied $1.12 to $109.13 per barrel in late afternoon deals in London. New York’s main contract, light sweet crude for delivery in January, or West Texas Intermediate (WTI), won 40 cents to $86.19 a barrel. —AFP