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Members of the Organization of Petroleum Exporting Countries left their 30 million barrel-per-day quota for oil production intact Wednesday, a decision that indicates the cartel’s satisfaction with current crude prices and its reluctance to do anything to further weaken the world economy.
But even though it stuck with the status quo, the group, whose representatives are in Vienna for the meeting, may face serious tests in the near future, as rising production outside the cartel threatens its market share and influence in the world.
So far, OPEC has had an easy year. Crude prices have been stable and within the range the organisation favors. Although US oil prices have fallen into a $80- to $90-per-barrel range, the non-US benchmark Brent crude remains well above $100-per barrel.
The OPEC basket, which members considers representative of what they receive for their oil, was $104.80-per barrel on Tuesday.
“At these prices no one wants to rock the boat,” said Bhushan Bahree, an OPEC analyst at IHS Cera , who was in Vienna for the meeting.
But the global oil market is going through major changes, led by the surge in oil production in the United States, which reached 6.5 million barrels per day in September, the highest since 1998 and a huge 900,000 barrels-per-day increase from a year earlier, according to the US Energy Information Administration.
Iraq, an OPEC member not subject to the organisation’s quotas because the country is recovering from the ravages of war, is also rapidly increasing production and now is at levels last seen in the late 1990s.
OPEC is unlikely to escape being buffeted by these shifts. “More production in the US means there is less available for OPEC,” said Jamie Webster, an analyst for Washington-based consultants PFCEnergy, who was in Vienna observing the meeting.