OPEC Agrees to Keep Production Levels Unchanged
The Organization of Petroleum Exporting Countries announced Sunday that the 12 member oil cartel had decided against making another output cut due to the potential harm it cause an already ailing global economy.
The group, which met in Vienna today to discuss methods of propping up oil prices which have fallen more than $100 a barrel since July, also said that they will aim to complete existing production cutbacks of 4.2 million barrels per day agreed to late last year. According to the latest figures, the cartel, which supplies 40 percent of the world’s crude oil, needs to cut an additional 800,000 barrels per day from production in order to fully comply with their previously agreed upon cuts.
Russia, which is not a member of OPEC but dispatched a delegation to the meeting, said that they would do their part to ensure the support of world oil prices by reducing its oil exports .
“We have also discussed the issue of having a permanent representative of the Russian federation to the OPEC’s secretariat,” said Russian Deputy Prime Minister Igor Sechin. “We believe that with this initiative a sustainable and prompt exchange of views between the parties concerned could be established. We believe it to be very important in a time of the [global] crisis.”
Russia is the world’s second-largest producer of crude oil, only trailing that of Saudi Arabia.
The United States was pleased with the OPEC decision not to cut production again.
“While OPEC’s actions are just one factor among many that go into the market price of oil, I’m pleased that there won’t be further production cuts,” U.S. Energy Secretary Steven Chu announced in a statement.
Algerian Oil Minister Chakib Khelil, who before the meeting announced that he was in favor of further cuts to crude oil production levels, later said that the cartel members will make an “extra effort” to comply with the existing cutbacks.
Oil prices will not rise a lot from today’s decision, Khelil added.