OPEC oil producers have agreed a new production limit that keep output at about the level it is currently.
Iran had wanted to cut production, which would boost prices. But Saudi Arabia’s argument — that levels should be maintained — won out.
OPEC members agreed they would lower their outputs if world demand for crude drops.
Venezuela’s Oil Minister Rafael Ramirez said: “We are worried about the economic situation, the world-wide economic situation and OPEC countries are working on that, we are worried about the demand for next year. In that sense, for this meeting we have to maintain the same level of production, not increasing the production.”
OPEC’s output hit a three year high in November of 30.27 million barrels per day. Higher supply, mostly from Saudi Arabia and its Gulf allies, has kept a limit on oil prices but they still averaged $107 a barrel this year.
The Saudis, and others in the Gulf, have been pumping more to make up for Libyan output lost to the civil war there. Libya is now increasing production with the cessation of violence.
That means Saudi Arabia has to decide whether to cut back to make room for rising Libyan output or keep the taps open to bring oil prices down and help stimulate the global economy.