OPEC announced yesterday it was keeping its oil output ceiling unchanged but vowed to eliminate overproduction as it sought to halt falling oil prices amid a weak global economy and eurozone debt crisis.
"Member countries should adhere to the production ceiling of 30 mbpd (million barrels per day)," agreed in December, the cartel said in a statement read out at a press conference following the meeting.
"They know they are producing 31.6 mbpd and they have been asked to reduce the 1.6," Abdullah El-Badri, the secretary-general of the Organization of Petroleum Exporting Countries, added.
"The countries that are participating in 1.6, we will not mention them, they will come back to 30 mbpd. They agree. This is a collective decision," he said.
Kingpin Saudi Arabia recently ramped up production amid divisions between OPEC members, who together pump one third of the world's oil, over how to respond to plunging prices and uncertainties over global energy demand.
"Stocks are very high and we have 58 days forward cover," El-Badri told journalists Thursday.
"The market is very well supplied. That's why we made this decision."
In its statement, OPEC noted that: "Downside risks facing the global economy... continue to mount."
The price of Brent crude oil has tumbled from $128 a barrel in early March to $96, mainly on expectations of weaker demand caused by the euro's troubles and a slowing Chinese economy.
"We discussed intensively the situation of the market, the economic situation in the eurozone, the overproduction in the market, and the most important thing is that we decided to maintain the ceiling of OPEC production," Venezuelan Energy Minister Rafael Ramirez told journalists as he left.
Before the meeting, several members had complained of an excess supply on the market, with hawks Venezuela and Iran calling for production cuts to boost oil prices.
In the first quarter, Saudi output jumped 250,000 barrels per day to 9.9 mbpd from a year earlier, according to OPEC estimates, in anticipation of sanctions on Iran, the cartel's second biggest oil producer.
An EU oil embargo due to come into force on July 1 was already strongly criticized by El-Badri and Venezuela this week.
Meanwhile, OPEC members were keeping a firm eye on developments in the eurozone, which have weighed heavily on oil prices.
Yesterday, most OPEC ministers agreed they favored an average price of at least $100 per barrel although Iran pushed for "between $100 and $120."
OPEC's next ministerial reunion will be held in Vienna on December 12, the cartel said.
The election of a new secretary-general to replace El-Badri, whose mandate expires at the end of the year, was delayed until then.*AFP