OPEC to Maintain Current Oil Output
OPEC ministers extended their campaign to restrain rival oil producers by continuing to pump oil into a global supply glut and keeping their combined daily production target at 30 million barrels.
The 12-nation cartel’s announcement after its June 5 meeting in Vienna was in line with analysts surveyed by Bloomberg News had forecast.
OPEC’s decision signals intensifying competition for market share among global producers and more pain for U.S. shale drillers, who already idled a record number of rigs, and should keep a lid on energy costs for consumers and help keep inflation in check.
“The more important part is how high the production will be over the next months and not the quota,” Giovanni Staunovo, a commodity analyst at UBS Group AG, said before OPEC’s decision was announced. “If they keep producing above the quota as they did over the past 12 months, this quota is irrelevant.”
OPEC members pumped 31.58 million barrels a day in May, exceeding their quota for a 12th consecutive month, according to data compiled by Bloomberg. Saudi Arabia is deploying the most rigs in at least two decades and operating with the lowest spare production capacity in about three years.
Indonesia said it was seeking to rejoin OPEC, seven years after rising reliance on imports prompted it to withdraw. The move would help to strengthen ties between oil producers and consumers, Indonesian Energy Minister Sudirman Said said in Vienna.
Crude futures rose $1.13 on June 5 to finish New York Mercantile Exchange trading at $59.13 a barrel, marking the first week that prices have declined since March.
