OPEC is likely to keep its output target unchanged when it meets on Friday because the global oil market appears to be in good shape and prices are expected to firm up from current levels, a senior Gulf OPEC delegate told Reuters. Two more OPEC delegates said they expect no change in policy on June 5 when oil ministers from the Organization of the Petroleum Exporting Countries (OPEC) are scheduled to meet in Vienna.
Oil prices have rallied after falling to a near six-year low close to $45 a barrel in January due to a global glut. Brent crude settled at $65.56 on Friday, up $2.98, or 4.8 percent, on the day. “It is unlikely that OPEC will make a decision regarding its production ceiling for two reasons: the first one that Russia and other non-OPEC producers have expressed their non-desire to cooperate in any idea of a production cut,” the Gulf delegate said on Sunday.
“And the second one is that the market is firming up. Prices are expected to continue at current levels and most likely will go higher. Demand is also strong and the inventories are balanced. The market seems to be in good shape,” the delegate said. Crude oil inventories are above the five-year average but oil products stocks are within the five-year average, the delegate added.