Trafigura Predicts OPEC Will Maintain High Output

by Ship & Bunker News Team
Tuesday October 27, 2015

Oil-producing members of the Organization of the Petroleum Exporting Countries (OPEC) are expected to keep supply flowing in order to continue its strategy of building market share, Reuters reports

"I'm expecting OPEC to be quite consistent in this position," said Trafigura CFO Christophe Salmon.

However, tensions between richer Gulf countries such as Saudi Arabia and countries like Venezuela, who have higher production costs, are expected to continue. 

OPEC members are set for a production policy meeting in Vienna on December 4, and Ian Taylor, CEO of Vitol, said "there is bound to be a huge amount of pressure on the Saudis from one or two people at that meeting to look at this policy again."

"I cannot believe they will want to change their strategy at this moment in time, but you can't rule it out totally."

Traders are also expecting that even the added supply that Iran stands to contribute as it ramps up its production and exports will not affect OPEC's high output levels, with Salmon commenting that he thinks "the market has already factored in the likely increase into the price."

Iran is reportedly ready to raise production by 500,000 barrels per day in the first week after sanctions are lifted.

Ship & Bunker reported last week that a technical meeting between OPEC and non-OPEC members did not come to any conclusions on crude output limits or a target range for prices.