OPEC keeps taps open despite low oil price

OPEC today again defied calls to cut output despite the low oil price, extending its new strategy to preserve market share and fend off cheaper competition from the US shale energy boom.
The decision to maintain output levels, made at a key production meeting in Vienna, leaves Organization of the Petroleum Exporting Countries' (OPEC) official collective target at 30 million barrels per day -- where it has stood for more than three and a half years.
"The ceiling is the same. You will be surprised how amicable the meeting was," Saudi Arabia's Oil Minister Ali al-Naimi told reporters after the gathering of the 12-nation oil producers' cartel that pumps one third of the world's crude.

The global oil market, plagued with demand worries, oversupply and booming US shale output, collapsed 60 per cent between June 2014 -- when West Texas Intermediate (WTI) crude stood at about USD 106 per barrel -- and late January, when it hit a six-year low under USD 45.
They have since recovered, but only to around USD 60, putting the budgets of many oil-producing nations under pressure while giving the battered global economy a much-needed fillip.
But OPEC, which has traditionally defended price levels by cutting output if needed, dramatically switched strategy last November when it opted to leave production unchanged -- despite a dramatic oil price collapse that slashed revenues for its members.

"There is a commitment from all the ministers that they will adhere" to the target, OPEC Secretary-General Abdullah El-Badri said today.

"As a matter of fact for the last four years we have been enjoying 100 plus dollars," he told reporters, noting that OPEC was now facing a "new reality" of lower price levels.
"At a certain stage we needed to lose our market share for less efficient producers," added El-Badri.
"As we see now, the demand is getting stronger so we respond to the demand."
OPEC -- which comprises nations from Africa, Latin America and the Middle East -- is actually pumping 31.2 million bpd, due to increased supplies from Saudi Arabia and Iraq, according to International Energy Agency data.

In response to today's decision, oil prices rebounded at first, but then fell back into negative territory.
Brent oil for delivery in July dipped 30 cents to USD 61.73 per barrel in early afternoon London deals, while New York's WTI for the same month shed 47 cents to USD 57.53.
"It was a very good decision," said Kuwait's Oil Minister Ali al-Omair, upon leaving the meeting.