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OPEC readies 30 million bpd oil deal

A new agreement between OPEC producers is expected to put a cap for all 12 countries output but will keep overall level near 3-year high

Reuters, Wednesday 14 Dec 2011
OPEc
The Organization of the Petroleum Exporting Countries ministers will consider a new supply target of 30 million barrels daily, roughly in line with current production (Photo: AP)
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OPEC oil producers gathered on Wednesday for a meeting that is expected to reset a production limit for the first time in three years and settle an argument over output levels in Saudi Arabia's favor.

The Organization of the Petroleum Exporting Countries ministers will consider a new supply target of 30 million barrels daily, roughly in line with current production.

"I think so, this is good," Angolan Oil Minister Jose de Vasconcelos said of the proposed 30 million bpd deal ahead of the meeting.

The expected agreement would put a cap on output for all 12 OPEC members for the first half of the year, keeping supply near 3-year highs.

Ministers may also discuss, but are thought unlikely to settle, individual national quotas.

When OPEC met in June it failed to reach an agreement on a higher supply limit, leaving Saudi Arabia free to open the taps to compensate for lost Libyan supply.

Oil ministers from the two biggest producers and main protagonists in June, Saudi Arabia and Iran, met face to face on Tuesday. "We had a friendly chat," said Iranian Oil Minister Rostam Qasemi. "Everything is OK."

Price hawks Iran, Venezuela and Algeria, all of whom already pump at full capacity, want to keep oil prices above $100 a barrel. Brent crude traded at just over $109 on Wednesday.

"We think the present level is appropriate for producers and consumers," Algerian Oil Minister Youcef Yousfi said of oil prices.

The hawks are seeking a commitment from Saudi and its fellow Gulf Arab producers Kuwait and the United Arab Emirates to make room for the restoration of Libya's supply so that collective production does not balloon over the course of 2012.

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