mines prices markets

OPEC delegates state that OPEC is unwilling to state individual output production quotas for members. The last output production limit had been set in 2008 for 11 members excluding Iraq. This quota was implemented to restrict supply as recession was affecting demand and prices. This imposed quota was never revised even though members had already raised production from mid -2009 as demand and prices recovered. The last OPEC meet failed to reach a decision concerning output, however it was declared that the quota imposed in 2008 was irrelevant in the present scenario.

OPEC is now hesitant to impose individual production quotas on members. Some members such as Algeria or Iran may find it difficult to admit that their production has come down since the last agreement. The previous quotas had been set by OPEC by taking into account the oil reserves and production capacity of members. The previous unrealistic quotas were not much of a problem as Saudi Arabia and others pumped more oil to make up for the shortage left by Libya.

A slow economic growth in the year 2012 may seriously harm the OPEC members if there are no specified production limits. Analysts claim that it seems unlikely that OPEC will have standard quotas for production. The reason stated is that key members of OPEC differ on outlook towards production.

OPEC needs to revise individual targets that will fit within the framework of overall targets and be agreeable to the members....READ MORE