Opec meets this week amid weak outlook

Opec ministers gather this week in Vienna to review group’s oil output levels against the backdrop of a weak global economy, fragile demand and oversupply. The Organisation of Petroleum Exporting Countries (Opec), whose 12 member nations pump one third of the world’s crude supplies, will meet on Thursday in the Austrian capital where the group is headquartered. At their last gathering in December, Opec members agreed to hold actual output at 30 million barrels per day, citing an uncertain demand outlook. Experts predict Opec this around will again make no move, keeping its official output target at 24.84mbpd — where it has stood for more than three years — despite sharp price falls that have cut precious revenues. In recent weeks, oil prices have fallen sharply, hit by oversupply and demand concerns linked to the eurozone debt crisis and the deteriorating global economic outlook. The market remains on tenterhooks over the eurozone crisis, with all eyes on upcoming Greek elections on June 17. It must also factor in the news that Spain has secured a European lifeline of up to €100 billion to save its stricken banks, following an emergency eurozone conference call on Saturday. Inenco analyst Gary Hornby argued that Opec would be happy to maintain the status quo because a low oil price was needed to boost growth. Brent oil briefly spiked to $128 in March, hitting levels not reached since July 2008 on supply jitters, but it has since slumped by about a quarter to strike 17-month lows. “Although oil prices have dropped below $100 per barrel recently on economic concerns, there seems little sign of any production fall,” Hornby said. Prior to this week’s meeting, Opec will host a seminar at Vienna’s Hofburg Palace with representatives of leading oil consuming nations and bosses from top energy companies such as Royal Dutch Shell and Total.from AFP.