Analysts Predict No Increase From OPEC

Oil cartel OPEC are widely expected to maintain production at current levels as they gear up to meet this week, according to economic analysts and comments from OPEC officials.

The organisation, comprising major oil exporting nations and covering 40% of the world’s oil supply, is responsible for managing oil prices and offsetting demand with supply through setting an economically-adjusted output level.

It had been expected that OPEC would step up oil production in the wake of spiraling oil prices to help ease the resulting global inflationary pressures, with oil prices nursing the $80 mark and supply apparently falling below international demand.

However, after comments from OPEC suggesting that current supply is sufficient, and underlying pressures to preserve dwindling natural resources, analysts are expecting the situation to remain unchanged from the meeting in Vienna this week.

It was also thought that any increase in input would help ease the US economy, which has been plagued by volatility in financial markets and on the stock exchange, as a means of enhancing growth and fuelling the economy for less.

Despite this, it is unlikely that OPEC will take measures to step up production after comments made over the course of the last few months suggesting that the problem with oil supply lay in inefficient US refineries.

With production outages in US refineries earlier on in the year, stockpiles had significantly dwindled, forcing the price of crude oil per barrel soaring towards the $80.00 mark.

Additionally, with rapidly growing demand from China and India to cope with their astronomical economic growth, oil prices look set to continue to remain high beyond the OPEC meeting this week.

With oil fundamental to economic growth and development, the decision will be eagerly anticipated by stock markets across the world, with the outcome likely to have an impact on the day’s trade.

Story link: Analysts Predict No Increase From OPEC