OPEC members failed to agree an oil production ceiling at their Vienna meeting, apparently allowing member countries to continue pumping oil at current rates into an oversupplied market. David Pollard reports.
Happier times for motorists - rock-bottom oil prices means a tank of fuel costs less. And could be even less still. OPEC is planning to maintain production near record high levels. Earlier reports suggested a new ceiling of 31.5 million barrels per day - compared to the current 30 million - to effectively take into account OPEC's existing overproduction. Though that number was not explicitly confirmed by OPEC president Ibe Kachikwu. (SOUNDBITE) (English) OPEC PRESIDENT, IBE EMMANUEL KACHIKWU, SAYING: "Current actual production, which is above the 30 million dollars, was agreed - and decided that reducing that is not going to make much of an impact on the market, so I guess the volumes we are talking about is current actual, not the thirty million barrels." The move thwarts pressure from within the group for it to curb supply. That pitted the smaller poorer OPEC members against the bigger and wealthier, led by Saudi Arabia. Iran is likely to welcome the move - it wants to boost its production when sanctions are lifted. But a world with already record oil stockpiles .... That, says BGC Partners' Mike Ingram, points to a dysfunctional cartel. (SOUNDBITE) (English) BGC PARTNERS MARKET STRATEGIST, MIKE INGRAM, SAYING: "OPEC is currently pumping something like 2.1 million barrels a day over quota. Iran which has been pushing for cuts in the same breath says that it wants itself to ramp production up by half to one million barrels per day and they want everyone else to take the hit on their own quotas. You know, that's just not workable. The bottom line is that OPEC isn't acting as a cartel." One of the biggest oil gluts in history may have a lot of mileage yet.