Opec members grow uneasy about cuts

22/05/2009

Discontent is growing among members of the Organisation of the Petroleum Exporting Countries (Opec) who want to see the daily production ceilings imposed by the cartel in response to the collapse in oil prices lifted.

Reuters reports that member states such as Venezuela, Iran and Angola are looking to lobby the cartel to lift the restrictions, which are equivalent to 4.2 million barrels of oil per day, or five per cent of global oil demand.

The cartel is likely to claim that its cuts have been instrumental in raising the price of crude, as well as distillates such as heating oil, DERV and gasoline, but further reductions are unlikely, Reuters reports.

Antoine Halff, analyst at Newedge in New York, commented: "Rumblings about quota allocations and production are getting louder. The need to manage those issues will likely make it difficult if not impossible for producers to speak in one voice on any change in production targets."

Many Opec members have seen their revenues from oil exports plummet since the collapse in oil prices in the wake of the financial crisis in September, with Venezuela particularly hard hit.