“Opec is committed to making sure the market is well supplied at reasonable prices,” Kuwaiti Energy Minister and Opec President Shaikh Ahmad Fahd al-Sabah said in Isfahan on Wednesday.
“Opec is doing everything it can to restore stability to the market.”
Under pressure from Saudi Arabia, near record prices and predictions of increased crude demand in the second half of the year, ministers decided to up their production ceiling immediately.
A decision on the second increase will be at the discretion of Shaikh Ahmad, as president of the grouping, and “in consultation with all member countries”, Iranian Oil Minister Bijan Namdar Zanghaneh said.
Shaikh Ahmad said a further increase would “depend on the prices”, while Libyan Energy Secretary Fathi Hamid bin Shatwan said Opec will “hold consultations in April and will apply it in May if it’s needed”.
Iran’s Zanghaneh: Opec did its
“We hope the market gets a positive signal from this meeting, because Opec did its most to have a stable market with minimal fluctuation,” Zanghaneh said.
“We did what we could but there are some factors, among them geopolitical, which are out of our control,” he added, saying the Islamic republic, Opec’s second biggest exporter, would be “satisfied” with a price of $40 a barrel.
Zanghaneh said Opec would next meet on 7 June.
Oil prices fell as traders assessed whether the quota increase would be enough to satisfy global demand.
New York‘s main contract, light sweet crude for delivery in April, fell 42 cents to $54.63 a barrel in electronic deals. In London, the price of Brent North Sea crude oil for delivery in April fell 44 cents to $53.41 a barrel in electronic deals.
“It remains to be seen whether the planned second quarter increase in output will be enough to push oil prices back down very much”
Barclays Capital analyst Kevin Norrish said Opec’s decision to raise quotas and production “will help ensure oil markets have sufficient crude oil to meet rapidly growing demand”.
However, he added, “it remains to be seen whether the planned second quarter increase in output will be enough to push oil prices back down very much”.
Saudi Arabia, the world’s largest producer, had warned that it could go it alone to boost output if it failed to win over sceptical Opec members of the need to bring prices back down from near-record highs, and meet predictions of increased demand for crude in the later half of the year.