OPEC meets to decide on oil output targets

OPEC holds a ministerial meeting Wednesday to decide on oil production levels, with markets expecting the cartel to maintain its official quota as a weak global economy hits demand for crude. Out the Organization of Petroleum Exporting Countries may decide to trim its actual production, which stands above the agreed ceiling, as OPEC hawks Venezuela and Iran seek to keep oil prices high. The Vienna-based organisation, which supplies a third of the world's crude, has had an output target of 24.84 million barrels per day (mbpd) for three years. The International Energy Agency said on Tuesday that OPEC in fact produced 30.68 mbpd last month as the cartel's kingpin Saudi Arabia pumped out extra crude despite Libya working hard to return to its pre-war output levels. The figure from the IEA agency representing major oil consuming nations includes output from Iraq, which is not part of OPEC's official output quota because of unrest in the country. Excluding production from Iraq, the IEA estimated that the cartel's other 11 member nations together pumped out 27.97 mbpd of oil in November -- still above the OPEC ceiling. Analysts said they expected no change to official quotas on Wednesday, a day after both OPEC and the IEA forecast slower oil demand growth because of the weak economic situation. Despite a drop in demand, oil prices remain high around $100 a barrel thanks to geopolitical unrest in the oil-rich Middle East, and especially in OPEC's second biggest producer Iran, which is also the cartel's current president. "We do not believe OPEC will lower the individual quotas per country" on Wednesday, said Torbjorn Kjus, an oil market analyst for DNB Bank. "What could happen is a looser OPEC agreement to limit total cartel output at 30 million barrels per day during the first half of 2012." Speaking on Tuesday, Venezuela oil minister Rafael Ramirez told reporters that Saudi Arabia and Kuwait "must accommodate" higher output from OPEC member Libya by cutting their excess supplies. He said "the Gulf countries have to reduce" their production, adding: "We believe there is enough oil in the market." Iran's oil minister Rostam Qasemi said: "We will have the meeting, and then we will decide" what to do regarding output quotas. On Sunday, Qasemi renewed Iran's own calls for Saudi Arabia and Kuwait to ease back their above-quota production as Libyan oil comes back onto the market. Saudi Oil Minister Ali al-Naimi said on Monday that he was happy with the kingdom's own crude output level of more than 10 mbpd to meet demand coming "from all over" the world. But the IEA noted on Tuesday that the eurozone debt crisis was hitting oil demand growth while OPEC lowered slightly its own world demand forecast for 2012. OPEC meets periodically to set production levels, hoping that its decisions result in fair oil prices for consumers and its dozen members, which also include Algeria, Nigeria and the United Arab Emirates. OPEC Secretary General Abdullah El-Badri last week said that current oil prices were "satisfactory," adding that supply was adequate. The IEA said on Tuesday that prices were winning support from likely sanctions against Iran.