OPEC Vienna Conference Ends With No Production Ceiling Ratified

Abdullah al-Badri, secretary general for OPEC, told reporters and analysts that OPEC was as strong as ever, only to be greeted with laughter.

As had been predicted by pundits, the December 4 meeting of the Organization of Petroleum Exporting Countries (OPEC) in Vienna, Austria ended with members failing to agree on an oil production ceiling, Reuters reports.

Most of the ministers left the conference without comment, but Bijan Zangeneh, oil minister for Iran, told reporters, "We have no decision, no number."

Abdullah al-Badri, secretary general for OPEC, said no agreements could be reached because it was unclear how much oil Iran would add to the market in 2016 following the lifting of the international sanctions.

According to OPEC sources, ministers initially agreed to raise the collective production ceiling to 31.5 million barrels per day (bpd) from the previous 30 million bpd, thus aligning it with real production numbers.

But although it is unclear what happened subsequently, the group was unable to ratify an official policy.

The event echoed the last time OPEC failed to reach a deal, in 2011, when Saudi Arabia called for the organization to boost output to avoid a price rise due to a Libyan uprising. 

Meanwhile, Goldman Sachs and Venezuela recently have both predicted oil prices could drop to $20 per barrel due to more oil being produced than consumed, and fewer places available to store the excess.

At one point following the meeting, Badri told reporters and analysts that OPEC was as strong as ever, only to be greeted with laughter.

Christopher Wheaton, energy fund manager and analyst at Allianz Global Investors, remarked, "Now the Viennese OPEC family gathering is over, the music has stopped and they're sweeping up, but nothing has changed - the oil production remains unchanged, the oil production quota remains divorced from real-world oil production, and the slightly dysfunctional OPEC family - like most families - has gone its separate ways."

The Conference decided that its next Ordinary Meeting will convene on Thursday, 2nd June 2016, also in Vienna.

Prior to the meeting, Zangeneh vowed that his country would not consider any production curbs until it restores output that was quashed under the sanctions.