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OPEC happy with world oil markets - but isn't without challenges

Friday, May 31, 2013 - 01:39

May 31 - OPEC oil exporters leave output policy unchanged at a closed session meeting in Vienna. As Kirsty Basset reports, OPEC faces several challenges - including the United States' rising oil supply.

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As OPEC ministers met for a closed session meeting in Vienna, the price of oil was sitting at around $100 a barrel, the group's preferred level. Saudi Arabia's oil minister Ali al-Naimi. (SOUNDBITE) (English) SAUDI OIL MINISTER, ALI AL-NAIMI, SAYING: "The world is in very excellent shape as far as the international oil market so we are very happy with it." OPEC has agreed to leave its output target of 30 million barrels per day unchanged for the rest of the year, as expected. The group has little room to do any more pumping than that - thanks to an oil boom in the U.S. OPEC said it's not worried about the U.S.' shale oil production - but it is having an impact. The U.S. doesn't need as much of OPEC's oil - and it's also now a stronger competitor for market share in Asia. Dan Morgan is a global commodity analyst at UBS. (SOUNDBITE) (English) DAN MORGAN, GLOBAL COMMODITY ANALYST, UBS, SAYING: "They've got the United States, which has emerged from nowhere from left field to retake its mantle as the world's largest oil producer potentially in a few years. That's a disruptive force on what OPEC is trying to do, which is constrain output and increase prices." Another challenge facing OPEC is Iraq, competing with regional rival Saudi Arabia to boost its market share in Asia. But Iraq's production and exports are not growing as swiftly as hoped due to infrastructure and logistical hurdles. (SOUNDBITE) (English) DAN MORGAN, GLOBAL COMMODITY ANALYST, UBS, SAYING: "They're looking to lift their capacity markedly. This new capacity, it remains to be seen whether they will be brought back into the fold of OPEC. And so that's something they're going to look at." The group will next meet in December - when it will choose its next secretary general.

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OPEC happy with world oil markets - but isn't without challenges

Friday, May 31, 2013 - 01:39