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VIENNA 31 May 2013 OPEC oil ministers meet at a time of uncertainty

At their 163rd ordinary meeting, the oil ministers of the Organization of the Petroleum Exporting Countries will be deciding produc

May 31, 2013 - NULL

VIENNA 31 May 2013 OPEC oil ministers meet at a time of uncertainty

At their 163rd ordinary meeting, the oil ministers of the Organization of the Petroleum Exporting Countries will be deciding production quotas at a time when the cartel is facing its lowest share in that market in more than a decade. OPEC has been the key influencing factor in the global oil market since the 1970s, and any loss of market share undermines its ability to control oil prices. The death of Hugo Chávez in OPEC-member Venezuela adds complications as his successor might choose a radical departure

VIENNA 31 May 2013 OPEC oil ministers meet at a time of uncertainty

At their 163rd ordinary meeting, the oil ministers of the Organization of the Petroleum Exporting Countries will be deciding production quotas at a time when the cartel is facing its lowest share in that market in more than a decade. OPEC has been the key influencing factor in the global oil market since the 1970s, and any loss of market share undermines its ability to control oil prices. The death of Hugo Chávez in OPEC-member Venezuela adds complications as his successor might choose a radical departure from his policies.

As reported by the Wall Street Journal, OPEC members said 2013 demand for their crude will be lower than previously forecast as output in non-member countries, particularly North American shale oil, ramps up. OPEC expects increases in supply from countries not in the cartel to grow by more than 1 million barrels a day, according to the newspaper on Mar 13. A study from the International Energy Agency in 2012 predicted that by 2020, United States oil production will outstrip Saudi Arabia's and could force the producer group to shift its trading patterns.

The newspaper also notes that under Chávez, the strategy of state oil company Petróleos de Venezuela SA (PDVSA) seemed to be allowing it to rust while hoping energy prices remain high, and that the charismatic Chávez plowed PDVSA's profits into social welfare projects while starving the enterprise of investment in exploration and production. His successor might be forced into heavier reliance on oil production to fund his predecessor's social programs and other obligations. (WRITTEN MAR 2013)

KEYWORDS: Organization of the Petroleum Exporting Countries, OPEC, 163rd meeting, 163rd ordinary meeting, OPEC meeting, May 2013, Vienna, Austria, Europe, oil prices, market share, global oil market, Hugo Chávez, Venezuela, International Energy Agency, IEA, energy news, oil news

RELATED READING:

Energy Journal: OPEC Acknowledges U.S. Oil Threat (WSJ 13 Mar 2013)
http://blogs.wsj.com/marketbeat/2013/03/13/energy-journal-opec-acknowledges-u-s-oil-threat/

Shale Oil Won't Stop OPEC (WSJ 14 Feb 2013)
http://blogs.wsj.com/marketbeat/2013/02/14/shale-oil-wont-stop-opec/?mod=WSJ_article_outbrain&obref=obinsite

Date written/update: 2013-05-31