OPEC will stick on no output cuts
21 December 2015, Nirapad News: OPEC will stick to its decision on Dec. 4 to maintain a policy of not limiting production, despite the drop in global prices, Iraq’s oil minister said on Sunday, adding that any output reduction aimed at boosting prices would have to be coordinated with non-members.
“We are in a real world, OPEC is not the only producer or the only player. So we have to see what the decisions of others should be – Russia and the United States and other producers,” Adel Abdul Mahdi told Reuters on the sidelines of an Arab oil producers’ meeting in Cairo. “OPEC can’t take a unilateral decision, for example, to cut production and others … raise production. Either we all go to cut production to really defend prices or we have to wait and see,” he said in an interview. “We can’t repeat those old experiences of OPEC and then lose both, lose production and the prices. Because now many other producers are capable of really raising their production … We are sticking (with the Dec. 4 decision).” Global oil prices tumbled after the members of the Organization of the Petroleum Exporting Countries (OPEC) failed on Dec. 4 to agree a ceiling on their oil production, which has already been running at near record levels since last year in an attempt to drive higher-cost producers such as U.S. shale drillers out of the market. In addition new supplies are likely to hit the market next year as Iran ramps up production after sanctions are lifted, creating fears of a growing supply glut. Front-month Brent crude futures [O/R] closed at below $37 a barrel on Friday. Abdul-Mahdi said he hoped oil prices would rebound but he did not “think it will be tomorrow.” “We can see that the price doesn’t correspondent with the cost in most oil fields. ?This is not logical,” he said.