OPEC oil ministers have agreed to keep the group’s production quotas unchanged at their meeting in Vienna.
The decision was no surprise but even so crude prices did rise.
In December 2008, responding to the economic downturn, OPEC imposed record cuts. It reduced output by 4.2 million barrels per day.
However, as prices have risen from a nascent recovery, some members have been pumping more than they are supposed to and OPEC has conceded that compliance is a problem.
On adherence to the production levels set in December 2008, OPEC’s Secretary-General Abdullah al-Badri said: “We tried to push but not that much.”
He added that increased demand later in the year would mop up the extra barrels the producers may pump: “We think the situation with the world economy and oil price make it a comfortable situation for everybody.”
OPEC’s wait and see approach on output was backed by a statement which said the world economy “remains balanced on a knife-edge of uncertainty” which it said will have a direct impact on how the group sees things in the coming months.
“While there has been improvement in the oil market outlook in recent months, there is still a long way to go before we can feel at ease with the situation,” OPEC President Germanico Pinto said in a speech before the meeting started.
But there were upbeat comments from the oil minister of Saudi Arabia, which is OPEC’s biggest producer and which has the world’s largest proven oil reserves.
Ali al-Naimi said global oil demand will grow by about one million barrels per day by the second half of this year and he concluded: “Good demand, reliable supply, beautiful prices – we are very happy.”