Oil Market: OPEC defiant on supply despite persistent fall in prices

crude OilAs Crude oil prices continue to slide on the global oil market, the Organisation of Petroleum Exporting Countries (OPEC) has expressed Optimism on the performance of the market saying that the world oil demand will increase in the Second half of 2015 and 2016.

OPEC made the observations in 167th Extra ordinary meeting held in Vienna Austria on June 5, 2015 in which a decision was taken to maintain supply.

Non OPEC members have accused the organisation for masterminding the market flooding which has lowered the prices making the market highly volatile. Despite the over supply, OPEC member countries continued to ship crude to the market even during the meeting.

“The Conference resolved to maintain the 30 mb/d ceiling and urged Member Countries to adhere to it.  Member Countries, in agreeing to this decision, confirmed their commitment to a stable and balanced oil market, with prices at levels that are suitable for both producers and consumers” The organisations echoed its supply resolve.

However, according to analysts, the statement of the oil producing giant demonstrates a bleak future of the market. OPEC it is said, is capitalizing on the law cost production to pump crude into the market as away of out competing its North American competitors.

“We forecast that Saudi and other low-cost producers will continue to increase output as this is the next logical step to maximizing revenues in the face of shale oil’s scalability.” Reuters quoted Oil market analyst Goldman Sachs.

Meanwhile the market registered a flop today following a low demand reportedly resulting from low demand from world largest oil consumers.

World biggest oil net importers like China have shunned the market, an indication that the nation has stocked enough oil products arising from the cheaper Market.

China bought nearly a quarter less crude in May than it did in the previous month, official data showed. China’s imports of oil products also fell by more than 6 percent while oil product exports fell 10 percent according to Reuters.

Click to see OPEC statement 

 

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