OPEC Rolls Over Production Ceiling
The Organization of the Petroleum Exporting Countries (OPEC) said it will maintain its current 30-million barrels per day (b/d) oil output level.
The decision was made in Vienna where OPEC oil ministers held their 165th meeting.
Iran’s Petroleum Minister Bijan Namdar Zangeneh said the OPEC ministerial meeting was held “without any important challenge” regarding the rollover of the “current level of OPEC production.”
“The situation in market is very well.... The supply and the price are very good and all is acceptable for the supply side and the demand side of the market,” Zangeneh said, adding that the oil market is unlikely to experience any “significant change” in the coming years.
The Iranian minister also stated that the oil market is forecast to remain “stable.”
Zangeneh said the OPEC will continue to play an influential role in the oil market despite investment by some countries in the shale oil reserves.
The 12-member body, which accounts for one third of the world’s oil production, has held its production ceiling at 30 million b/d since December 2011.
After the announcement of OPEC’s decision, Brent North Sea crude for delivery in July soared to $109.97 a barrel, up 45 cents, in London midday transactions.
WTI for July reached $104.51 a barrel after a 16-cent gain.
OPEC members had said they were happy with current price levels at above $100 a barrel.
The group, whose members produced 29.6 million b/d in April, forecasts a demand of 30.4 million b/d over the coming six months.
Zangeneh Meets OMV
Zangeneh who travelled to Vienna for an OPEC meeting said he had met with Austrian oil and gas group OMV and other foreign oil companies, as Tehran prepares to offer oilfields, projects and its final investment contract in November.
He declined to name the other firms involved in the talks, held on the executive floor of an international hotel cleared of reporters.
"The companies are coming and visiting. At least they are showing that they are keen on exploring these possibilities, to get prepared for what they want to do," a source close to the matter said.
Zangeneh had met some Western oil executives at OPEC's previous meeting in December, including Italy's Eni and Royal Dutch Shell.
The main priority for Iran will be rehabilitation of mature oilfields - Ahwaz, Aghajari, Gachsaran, Marun and Bibi Hakimeh which together make up more than 80 percent of its total output, Zangeneh had said.
When asked how Iran would react if sanctions were not lifted, Zangeneh replied: "We entitle ourselves to increase our output in whatever way we can."
2014 Oil Market Balanced for
Oil markets should be balanced during the second half of this year with extra production sufficient to meet growing demand, OPEC said on June 12, suggesting oil prices may be fairly stable despite worries over lost supply.
Oil prices rose sharply the same day with Brent crude climbing above $112 for the first time since March on worries that violence in Iraq could disrupt supplies.
But the Organization of the Petroleum Exporting Countries, which supplies a third of the world's oil, said rising oil production should be more than sufficient to meet demand.
The organization of 12 exporters said global oil inventories were comfortable. US stockpiles were high and commercial stocks in the large developed economies were sufficient at the end of April to meet almost two months of consumption.
"Overall, the ongoing rise in supply would be adequate to satisfy the growth in oil demand in H2 2014, resulting in a well-balanced market," OPEC said in its monthly market report.
A day before, OPEC agreed on to keep its oil production ceiling at 30 million barrels per day (b/d) for the second half of this year. The grouping is happy with oil prices above $100 a barrel and its members are pumping enough oil to cover their spending needs.
According to the OPEC report, output from the United States and Canada and other non-OPEC countries would add 1.44 million b/d of extra oil to world markets this year, 60,000 b/d more than OPEC's previous forecast.
This would outstrip its projection of a rise of 1.14 million b/d in global oil demand and mean less demand overall this year for oil from OPEC.
OPEC cut its forecast of demand for its own crude in 2014 to 29.69 million b/d, down 70,000 b/d from its previous estimate.
The report, citing secondary sources, said total OPEC oil production rose 142,000 b/d to 29.76 million b/d in May, led by increased production in Angola, Iraq and Saudi Arabia.
Iran Crude Oil Price up $1.08
Iran sold crude oil at $105.40 per barrel in May, a $1.08 rise compared to April, the Organization of Petroleum Exporting Countries (OPEC) said in its latest report.
The country’s crude oil price was $104.72 on average during the first five months of 2014, the report added.
Iran's crude oil exports increased in May after a decline in April, according to sources who track tanker movements, moving above the level allowed by November's interim deal on Tehran's nuclear program.
The increase appears to be led by higher sales to China in particular.
Iran's exports have averaged 1.38 million bpd in May. That represents an increase from 1.1 million bpd in April, as estimated by the International Energy Agency.
Total OPEC crude oil production averaged 29.76 million bpd in May, an increase of 142 thousand bpd over the previous month, according to secondary sources.
Crude oil output increased from Angola, Iraq, Saudi Arabia, Iran, UAE, Nigeria, and Ecuador, while production decreased in Libya, Kuwait, and Algeria.
Preliminary data indicates that global oil supply increased by 0.20 million bpd to average 90.99 million bpd in May 2014, compared with the month before. The increase in May came from non-OPEC supply and OPEC production. The share of OPEC crude oil in total global production stands at 32.7 percent in May.