OPEC members agree to leave production at current levels

In the face of recovering crude oil prices, the Organisation of Petroleum Exporting Countries (OPEC) members agreed to keep its oil production quota unchanged at its meeting in Vienna today.

Saudi Oil Minister Ali al-Nuaimi said ministers had reached agreement on leaving production at current levels and told reporters: “We are very happy with the situation as it is.”

Following the announcement, which was widely expected, crude oil prices rose above $82 a barrel.

Oil prices also gained after the US Federal Reserve announced it would keep low interest rates for an extended period.

Meanwhile, OPEC members, which comprise Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela, recently highlighted high oil inventories, low demand and recovering crude prices for reasons why the cartel does not need to change its ceiling.

Oil prices reached a peak of $147 in July 2008 but dived as low as $40 in January 2009. However, oil prices have recovered as the global economy emerges from recession.

Andy Lipow of Lipow Oil Associates has forecast crude futures could hit $90 to $95 by the end of the year but should the recovery falter or countries fall back into recession, oil prices risk falling back.