OPEC maintains output target; supply and demand are 'in balance'
Organisation of Petroleum Exporting Countries (OPEC) has maintained its output target with Saudi Arabian Oil Minister Ali al-Naimi commenting that supply and demand are “in balance” and USD70-80 is “a good price” for oil (Associated Press/Bloomberg, 12-Dec-2010). OPEC also dismissed last week's USD90 oil prices as a "blip". OPEC forecasts demand growth will slow as the economy struggles to recover, amid ample supplies. OPEC has kept production limits at 24.845 million barrels/day since Dec-2008 when it announced the largest reduction in output quotas ever as demand collapsed and prices plummeted at the onset of the global recession. Oil prices increased to the highest level since Oct-2008 last week on cold-weather forecasts for the US and Europe and speculation the US may extend stimulus measures, causing the dollar to weaken. OPEC Secretary-General Abdulla El-Badri added that, “right now the market is very comfortable for consumers” adding that there is “plenty of oil” in the market and OPEC would not act to raise production until those levels decline. OPEC has 6-7 million barrels/day of spare capacity, El-Badri added.