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 Core Gulf members of the Organization of the Petroleum Exporting
Countries, which pumps over a third of the world's oil, have a
consensus to maintain the group's oil output at its meeting on
Friday, a senior Gulf OPEC source has told Reuters.
"There is consensus among Gulf OPEC countries, and others, to keep
the (production) ceiling unchanged," the OPEC delegate told Reuters
in Vienna. "Nobody wants to rock the boat. The meeting is expected
to be smooth sailing."
The dollar gained around 0.4 percent against a basket of other
currencies <.DXY> as the euro <EUR=> slipped, making fuel more
expensive to holders of other currencies.
Benchmark Brent crude oil for July fell $1.75 to a low of $63.74
before recovering a little to around $63.90, down around 2.5
percent, by 1010 GMT. U.S. crude was $1.40, or 2.25 percent, at
$59.86 a barrel.
Brent collapsed last year, falling to almost $45 a barrel in January
from above $115 last June, squeezing many oil producers in countries
outside OPEC, including U.S. shale drillers.
Comments by OPEC ministers in Vienna this week have reinforced a
view among investors that the big Middle East oil producers will
carry on pumping oil nearly flat-out for many months to come,
content that lower prices will knock out some of their competitors.
Saudi Arabian Oil Minister Ali al-Naimi told a conference organized
by OPEC in Vienna on Wednesday that the group was "currently meeting
global demand and I don't see this changing".
"In terms of the long-term energy outlook, the future looks very
positive," the veteran Saudi minister said.
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OPEC is pumping around 2 million barrels per day (bpd) more than
needed at the moment, helping fill oil inventories worldwide and
keeping the price of oil for delivery now at a discount to futures
prices.
Some analysts have said there is a chance OPEC could even increase
its production target this week.
"With heightened geopolitical risk threatening oil supplies in the
Middle East and North Africa, it is highly unlikely that OPEC will
reduce the quota, but an increase is possible," Barclays said in a
preview note of Friday's meeting.
Analysts from Citi said this week that given OPEC was widely
expected to maintain its output policies, the global surplus would
last well into 2016.
(Additional reporting by Henning Gloystein in Singapore; Editing by
Pravin Char and Elaine Hardcastle)
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