On 11 June OPEC held its 165th meeting in Vienna and the organisation’s 12 members decided to maintain its production volume of 30 millon barrels of oil per day (Mb/d). The meeting is reported in the OPEC Bulletin 6/14. They also decided to extend Abdalla Salem El-Badri’s term as general secretary of OPEC until the end of the year. After the meeting a press conference was held during which General Secretary El-Badri stated, “Right now we have a very comfortable crude oil price, the market is stable and OPEC is producing 30 Mb/d of crude, more or less. The consumers are getting their supplies and the producers a good price. Everybody is Happy.”
On the question of whether shale oil production in the USA was a threat to OPEC the answer was that it was not because the USA would not be an oil exporter. With regard to future investments El-Badri considered that OPEC had a good plan for investments and stated they would study the balance between demand and production. In conclusion he said that “OPEC will continue to play its part in supplying the world with enough crude oil”.
In the OPEC Bulletin some of the external guests to the meeting were also interviewed. Of special interest was the interview with Michael Rothman from Cornerstone Analytics in the USA. He stated that the market was very tight because the increase of 3 Mb/d that they had hoped for at the beginning of the year had not eventuated. Only half this amount had been achieved and this could indicate that OPEC must increase its production by 1.5 Mb/d if prices were not to rise. Regarding shale oil in the USA he commented that it was “a very short-life resource”. He also noted that many oil companies believed that their production in the USA would reach a maximum around 2016-7. Regarding global production he noted that there are 81 nations outside of OPEC that produce some form of oil and that 80 of these, (i.e. all except the USA), produce less oil today than they did five years ago. “So the hope that somehow US production will bail out the market from production problems is proving to be much more questionable than has not been generally recognized as yet”.
OPEC bulletin 14/6: http://www.opec.org/opec_web/static_files_project/media/downloads/publications/OB062014.pdf
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