In the recently held meeting, the Organization of Petroleum Exporting Countries (OPEC) has decided that it will increase crude shipments through late December. The decision was taken as the organization thinks that there will be an increase in the production in the winter, and so will be the requirement for heating.
In the statement released by the organization, it said that in the interest of maintaining market equilibrium, the Conference decided to maintain the current production level of 30.0 million barrels a day. The prices of crude declining to some extent, the new decision on the part of OPEC seems to further aggravate the situation for oil companies.
Taking Steps to Respond Swiftly
In its statement OPEC said that it is taking this decision and confirming its readiness to swiftly respond to developments which could have an adverse impact on the maintenance of an orderly and balanced oil market. Currently, OPEC supplies about 40 percent of the world’s oil is expected to increase production by 710,000 barrels a day.
Thus, with a 3 percent increase to existing 24.22 million barrels in the four weeks to Dec. 21, OPEC is trying to cooperate with the uncertainties arising from the enduring weaknesses in the world economy. In fact, the OPEC is monitoring developments in supply and demand, as well as non-fundamental factors to act swiftly to meet contingency.
The OPEC Satisfied With the Current Demand
In the recently held meeting the OPEC decided to maintain its production target at 30 million barrels a day as the group is satisfied with current demand. A slight increase will be seen in the production from Middle Eastern which is expected to increase 2.3 percent to 17.65 million barrels a day in the month to Dec. 21.
The twelve member of OPEC including of Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela, are part of the cartel that manipulates oil prices. They produce only that much crude that helps them maintain the prices that favor them.
Iran to Boost Its Crude Production
After facing economic sanctions from the U.S. and other allied countries, Iran recently agreed to cooperate for nuclear agreement and in consequence, now it can export oil as it was doing during pre-sanction period. However, it now wants to boost its production so that it can fix its economy by exporting it to India and China, the two biggest customers.
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