LUANDA, Angola — OPEC held its year-old output targets unchanged, as the group grappled with overproduction by some in its ranks that could undercut efforts to support oil prices amid a fragile global economic recovery.
The Organization of the Petroleum Exporting Countries wrapped up its meeting Tuesday in the Angolan capital by deciding that the best plan of action was not to act. The 12-member bloc highlighted concerns about the strength of the global economic recovery, and again called on oil producers outside the group to co-operate in propping up oil markets.
The lack of action appears meant to avoid shocking an oil market in which crude prices have stayed within range of OPEC’s unofficial target of US$75 a barrel for months. The relative price consistency has provided OPEC a measure of relief after oil demand and prices collapsed last year amid the world’s worst recession in over six decades.
OPEC, explaining its decision to hold output steady, said in its final statement that “it is not yet clear how strong or durable the recovery might be.” It stressed, however, that its members were ready to “respond to any developments which might place oil market stability and their interests in jeopardy.”
Oil futures edged down to nearly $73 per barrel shortly after OPEC’s decision — still within the threshold with which kingpin Saudi Arabia and other members have argued was fair for producers and consumers.
“It is more than an anticlimax to learn that nothing has been agreed on this occasion,” said John Hall, chairman of EnergyQuote’s John Hall Associates consultancy in London. “This has been a token meeting … Any OPEC decision-making will be governed very much by economic activity and whether OPEC members can report a genuine increase in demand for their products globally.”
Earlier Tuesday, several OPEC ministers voiced satisfaction with existing prices. Ali Naimi, the oil minister from Saudi Arabia, described them as “perfect, perfect,” while Ecuador’s oil minister, Germanico Alfredo Pinto Troya, said current prices are “good for everybody, especially producers.”
While the decision to hold steady targets was expected, the significance may be in that a group which has often been accused of ogling high prices without regard for the consequences has shown a strong measure of understanding for economic worries.