OPEC, the Organization of Petroleum Exporting Countries, is not expected to make any big changes in production quotas at a meeting Sunday in Vienna.
Recent cold weather in the United States and Europe has boosted the demand for heating oil, and led to strong oil prices. Oil ministers from OPEC member countries say they expect to stick with current production levels.
Analyst Ehsan Ul-Haq of PVM oil in Vienna says OPEC ministers are likely to resist cutting production, at least for February and March.
“I think, they will probably do nothing, because OPEC’s reference basket has increased by more than nine dollars since their last meeting in Cairo, and it will not be easy to justify any cut. And, because of this, I don’t think they will change their production quotas,” he said.
Mr. Ul-Haq says most OPEC members are exceeding official production quotas, and prices were within reach of $50 a barrel this week, but he says this could soon change.
“I think prices will go down a bit, because temperatures are expected to be above normal in the United States and the North East, and in Asia demand is not as high as in the past two quarters,” he added.
OPEC will meet again in March in Isfahan, Iran, to review prices and production.
– Marlene Smith – Voice of America
— Reprinted with the permission of Voice of America