OPEC May Reduce Oil Production Quota
OREANDA-NEWS. October 14, 2010. OPEC is to convene for a regular meeting in Vienna, to consider crude production quotas. We expect the cartel to leave the current quotas in force. On October 13, OPEC released a monthly report on the oil market, where it predicted oil demand to decrease, down to 26.6 mn bbl a day this year, 100 000 bbl less than in the previous-month forecast.
However, a fall in demand would not yet mean a drop in production quotas. Most likely, OPEC will abide by the existing limitations with more accuracy. Last time the cartel reduced the quota was in 2008, when it was lowered to 24.845 mm bbl a day; however, the Organization still produces more.
In September, OPEC recovered 29.1 mn bbl a day; therefore, the conformity of production rates to the set quotas has gone up from 53% in August to 57% in September. OPEC predicts global crude demand to surge to 85.59 mn bbl a day this year, up from 84.46 mn bbl a day in 2009; however, it is oil-exporting countries that are not members of the consortium, such as Russia, China and Brazil, which are trying to meet the growing demands.
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