OPEC has been successful in more than doubling oil prices after they ebbed to five-year lows in December. This outcome could persuade ministers to maintain production quotas after this week’s meeting. Oil prices touched US$75 a barrel on Aug. 25, a fair price for consumers and producers. OPEC members are not expected to seriously consider deepening or extending the cuts at this stage, as they have pulled out a lot of oil out of the market and this could clear up the markets. OPEC is not expected to change output at the Vienna meeting, as they are aware that economic recovery is in the very early stages and that they need to be careful about that. If they cut quotas they could risk pushing the price up too far, too fast.
While OPEC made the steepest supply cuts in its history, some producers outside the group have augmented market share to fill in the gap. Non-OPEC suppliers, including Russia and Brazil, will have collectively raised daily output this year by 350,000 barrels to 51 million bpd, according to the IEA.
08-Sep-09 
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