OPEC to hold crude production at current levels despite falling oil prices

By STEPHANY ROMANOW

The Organization of Petroleum Exporting Countries (OPEC), which is responsible for nearly one-third of the global crude oil supply, announced no changes to present production quotas following the November 27th meeting.

During a press conference, the 12-nation cartel announced that the group will maintain the 30-MMbpd crude oil production level for the next six months. 

“The cartel will sit tight before the next output meeting scheduled for June 2015 in Vienna, Austria," said OPEC secretary-general Abdullah El-Badri. "We have to wait and see how the market will settle." 

News of OPEC's decision triggered a decrease in oil prices in early trading. WTI traded under $70/bbl and Brent oil prices also tumbled to under $75/bbl early on Friday, November 28.

OPEC faced pressure by the poorer members of the cartel to cut production and to stop the collapse of oil pricing. Venezuelan President Nicolas Maduro urged the cartel to cut oil output and boost crude prices back to the $100/bbl market conditions.

OPEC’s stay on production quotas continues during the present oversupply of oil within the market place.

Likewise, crude prices are being depressed by a strong US dollar and worries of stalling energy demand linked to a weak global economy.

Earlier in the week, the International Energy Agency (IEA) warned that the "price rout" was not over and that crude futures would slide well into 2015. Lower oil prices are feared to fuel deflation in weaker economies such as the eurozone.

OPEC produced above the agreed target limit; the cartel produced 30.6 MMbpd in October 2014, according to IEA.