As OPEC meets to debate outputArticle | June 14, 2012 – 12:26am | By Eki Toju
The Minister of Petroleum, Diezani Alison-Madueke, on Wednesday said she expects currently volatile oil prices to settle in the next six months.
Speaking to reporters ahead of an OPEC meeting Thursday, Alison-Madueke said “volatility in various markets” had affected oil prices.”
The Organisation of Petroleum Exporting Countries is meeting Thursday to debate output.
For years OPEC meetings got bogged down in bouts of jealous over member countries’ crude output quotas, a national badge of oil power.
In 2008 the Organisation of the Petroleum Exporting Countries decided not to disclose quotas, but in December 2011, it lost patience with the endless arguments and discreetly dropped them altogether, settling for an overall group output limit.
That cut out some of the quarrelling but left a big question: how to police production and maintain credibility, especially when the lion’s share of spare capacity for adjustment is in the hands of one member – Saudi Arabia.
Monitoring individual output carefully doesn’t matter much when oil supplies and prices are rising, as was the case for the year until March.
But with crude down $30 since March to below $100 for Brent, quotas may be needed again if oil traders are to be convinced that OPEC means business.
OPEC agreed to pump 30 million barrels per day (bpd), its first new output agreement in three years. It did not set member country quotas.
The target was never adhered to and production has risen by 1 million barrels per day in 2012 to almost 32 million bpd, a four-year high, despite tightening sanctions on Iran that cut its exports
