Despite risking the oil market with further volatility after it decided last week to stick with its current high production levels, the Organization of the Petroleum Exporting Countries (OPEC) used its latest oil market report to stress that it was committed to market stability.
In the report, out Wednesday, the 12-member oil producer group justified its decision to keep production at 30 million barrels a day, reiterating its forecasts that the current oversupply in the market was likely to ease over the coming quarters against a backdrop of a global economic recovery and growing oil demand.
“The projections for market fundamentals indicate that the current oversupply in the market is likely to ease over the coming quarters,” OPEC said in its report released Wednesday.
“Based on these expectations for the second half of the year, the OPEC Conference agreed to maintain its output at 30 mb/d and urged Members Countries to adhere to it. In agreeing to this decision, Member Countries confirmed their commitment to a stable and balanced oil market, with prices at levels suitable for both producers and consumers.”
OPEC’s decision was largely seen as a continuation of its strategy to put pressure on its rival U.S. shale oil producers, who have higher production costs and therefore struggle with lower oil prices, which are currently trading around $65 a barrel for benchmark Brent crude and $61 for U.S. crude, with prices half the amount seen last June.