By Chika Amanze-Nwachuku
Iraq’s Oil Minister, Abdul-Kareem Luaibi, has said the Organisation of Petroleum Exporting Countries (OPEC) will likely decide to cut oil output at its December 14 meeting in Vienna as global oil demand is expected to decline next year.
Reuters reported last week that industry observers said a cut in output was unlikely to find support among the Gulf Arab OPEC members while oil prices remain well above $100 a barrel.
According to the report, Iran aims to persuade OPEC members to return output production to levels before they were raised earlier this year in response to the Libyan crisis. Iran along with African producers and Venezuela, blocked a Saudi-led proposal to increase output targets at OPEC's last meeting on June 8, but Saudi Arabia and its Gulf OPEC allies boosted output unilaterally afterwards.
The Iraq's Oil Minister was reported to have also told reporters that he expects oil prices to trade between $100 and $120 a barrel, which is "reasonable" and "acceptable" for Iraq.
The 12-member group had in its latest Monthly Oil Report stated that its forecast for global oil demand growth in 2012 remained unchanged at 1.2 million barrels a day mb/d, but noted that uncertainties in the world economic outlook for the coming year have increased due to the challenges facing the Organisation for Economic Cooperation and Development (OECD) economies.
The group also projected global oil demand growth at 900,000 barrels per day in 2011 - unchanged from its September figures, noting that demand in industrialised nations is seen dropping further "as a result of slowing economic momentum, particularly in the (European Union)." OPEC's forecast for world economic growth in 2011 also remained unchanged at 3.6per cent, while the forecast for global growth in 2012 had been revised down from 3.7per cent to 3.6per cent.
World oil demand growth in 2011 was forecast at 0.9 mb/d, unchanged from the previous report. Despite the emerging winter season, OPEC said OECD oil demand was expected to see a further contraction as a result of slowing economic momentum, particularly in the EU.
Moreover, US gasoline demand has been on the decline for the past four months reflecting the sluggish economy. The forecast for global oil demand growth in 2012 also remains unchanged at 1.2 mb/d. However, uncertainties in the world economic outlook for the coming year have increased due to the challenges facing the OECD economies.