OPEC Looks to Raise Output Ceiling at December Meeting

Taking into consideration Indonesia's recent membership, OPEC is said to be mulling an increase to its production target by 1 million bpd.

Taking into consideration the addition of Indonesia to its membership, the Organization of the Petroleum Exporting Countries (OPEC) is said to be mulling a 1 million barrels per day (bpd) raise in its production target to 31 million bpd at its December 4 meeting, Bloomberg reports.

The news comes in contrast to calls from some members to lower output in an effort to raise prices.

However, it is noted that a change to the production target won't necessarily mean higher production, as OPEC says it pumped 31.57 million bpd in September, even with the current 30 million bpd target.

OPEC announced in September that Indonesia had requested to rejoin OPEC after a seven-year leave, having become a net oil importer in 2009, although some analysts were unmoved over the development.

"I can't see any benefit for OPEC countries from the rejoining of Indonesia except that it might help to end the deadlock over selecting a new secretary general," said Abdulsamad al-Awadhi, a London-based analyst and Kuwait's former OPEC governor, of Indonesia's confirmation of its OPEC membership.

"The issue is that Indonesia is not meeting the criteria of an oil exporting country. You can't have a member of OPEC who can agree on a cut of production when he is an importer of crude. That doesn't work."

With plans to add new refinery capacity, Indonesia is expected to remain a net importer of crude in 2020.

Indonesia's re-entry into OPEC is expected to be formally announced at the December 4 meeting.

Last week, a leaked internal OPEC report has revealed that the organization expects crude prices to remain under pressure through to 2019.