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 With oil prices having stabilized, at around $65 a barrel, some $20
above their January lows, there's little appetite within the
Organization of the Petroleum Exporting Countries to modify
production limits.
"There is consensus among Gulf OPEC countries, and others, to keep
the ceiling unchanged," a senior Gulf OPEC delegate told Reuters
late on Tuesday after an informal meeting of the four core Gulf Arab
OPEC members earlier in the day.
Iraqi oil minister Adel Abdel Mahdi said there was "optimism and
general acceptance with the current situation".
The group meets on Friday following a two-day seminar featuring the
chief executives of the world's biggest energy groups, including BP
<BP.L> and Exxon <XOM.N>, companies whose fortunes have been
abruptly altered by OPEC's decision to abandon efforts aimed at
sustaining oil prices at more than $100 a barrel in favor of
defending market share.
"Nobody wants to rock the boat," the Gulf source said. "The meeting
is expected to be smooth sailing."
OPEC Secretary-General Abdullah al-Badri said on Wednesday that it
would likely be a brief meeting.
"Everything is very clear."
That marks a change in tone from OPEC's last meeting in November
2014, when Venezuela and others mounted an unsuccessful bid to
convince Saudi Arabia and its Gulf allies to tighten the taps on
supply.
Instead, the kingdom laid out its new laissez faire approach, saying
it will no longer consider cutting output without the cooperation of
non-OPEC producers such as Russia.
This time calls for collaboration have been muted.
The Gulf source said the outlook for the oil market is positive,
especially in the second half of this year, which Qatar's oil
minister Mohammed al-Sada said should be "more balanced".
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"You can see that I'm not stressed, I'm happy," Saudi oil minister
Ali al-Naimi said on Monday.
IRAN'S RETURN
There may still be some choppy moments. Iran is seeking to clear
space for its gradual return to the oil market after years in which
sanctions halved its oil exports to as little as 1 million barrels
per day (bpd), an official said on Monday.
However, even if Iran and world powers meet a June 30 deadline for
finalizing a pact on gradually winding back nuclear-related
sanctions, most analysts expect it will be months, if not a year or
more, before Iran's production begins to recover, leaving OPEC
little reason to sort it out now.
"Due to heightened uncertainty with an (Iran nuclear) deal, we think
OPEC is likely to take a wait-and-see approach to the prospect of
additional oil," analysts at Barclays wrote.
Some analysts, including those at Morgan Stanley, have raised the
remote possibility that OPEC might surprise the market by increasing
the output ceiling, now set at 30 million bpd. Some of OPEC's 12
members have dismissed that option.
(Additional reporting by Rania El Gamal and Jonathan Leff; Editing
by Janet McBride)
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