OPEC ready to cut supplies in 2013 to support oil prices

Associated Press

Published — Friday 14 December 2012

Last update 20 December 2012 11:37 am

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VIENNA: OPEC does not see increased US oil output as a threat to its interests but is skeptical about current forecasts on the boom of American shale gas production, a senior official of the 12-nation group said.

OPEC Secretary-General Abdullah Al-Badry also said figures supplied by Iran show it producing around 3.7 million barrels a day. That is the same amount as Tehran pumped before international embargos on its crude that took effect this year and had been estimated to have cost it hundreds of thousands of barrels a day in sales.

Al-Badry spoke to reporters a day after OPEC ministers agreed to keep their daily crude production target unchanged at 30 million barrels. 

They also extended his term for a year after failing to agree on a successor for the post because of rivalries among member states.
OPEC, which accounts for about a third of the world’s oil production, is projecting a slight fall in demand for its crude next year, and world inventories are well stocked, in part because of resurgent production by the United State, which is tapping into oil extraction from shale.
The Paris-based International Energy Agency is predicting that America will be a net exporter of oil by the next decade and could overtake Saudi Arabia as the world’s top crude producer by 2020. Analysts have suggested a looming dent in OPEC influence as a result.
But Al-Badry said his organization “is not really concerned” about any increase in world supply due to US shale extraction.
He questioned industry estimates that US shale extraction could amount to an extra 3 million barrels of oil a day within 20 years as well as forecasts of US energy independence. At the same time, he said any extra supply was welcome.
“It’s fine with us, it’s another source of energy and the world really needs this oil, I don’t see it as a threat to OPEC” he said.
His comments on Iranian production indicated that figures from other organizations may be off or that Tehran’s statistics might be inaccurate.
Oil exports from Iran have dropped this year as a result of international sanctions imposed due to concerns that Tehran may be seeking nuclear arms — something Iran denies. The International Energy Agency, which offers energy expertise to industrialized country, said last month that Iranian oil output was at a daily 2.7 million barrels in October.
But Al-Badry said Iran has told OPEC that it is producing 1 million barrels a day more than that, which would equal output before the embargoes took hold.
Ahead of Wednesday’s OPEC oil ministers’ meeting, Iranian Oil Minister Rostam Ghasemi played down the effects the sanctions were having on his country, claiming the Iranian state had cut its financial dependence on oil income by 20 percent in the last three years.
“Next year we will do the same,” he said.

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