Headlines
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Crude oil higher even if OPEC keeps quotas unchanged
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Gold stays slightly below 1000 $/oz
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Profit taking weights on base metals
Brent and Distillates
A weaker dollar pushed crude prices higher on Wednesday ahead of OPEC ministers’ meeting.
As widely expected the oil producers’ group decided to maintain its current output targets and called for more rigorous compliance with production quotas by members. Current production quotas at 24.845 mln.b/d but the expected August output is estimated at 26.055 mln.b/d. According to OPEC Secretary-General A. El- Badri, the cartel is satisfied with the price around 70$/b and as the global economic recovery goes on the price should continue up again.
Global oil demand will shrink this year by 2.2 % to 84.4 mln.b/d, even with an upward revision of 490kb/d from last month’s report, the IEA report said. As OPEC urges members to adhere more closely to output cuts of 4.2 mln.b/d agreed through last year, the IEA estimates that the group’s compliance with its quotas slipped last month as Nigeria, Venezuela and Angola overproduced.
Supplies from the 11 OPEC nations subject to quotas, from which Iraq is exempt, rose by 80 kb/d in August, to 26.25 mln.b/d. That is about 1.4 mln.b more than a day target.
As the IEA left its estimates for non-OPEC production unchanged for 2009 and 2010, higher global demand forecasts mean the world will require more crude from the producer group. The agency raised its “call on OPEC crude” by 500 kb/d for 2009 and by 400 kb/d for next year.
