OPEC Will Likely Cut Its Oil Production Next Year as Prices Risk Falling in Reaction

AFP reported that OPEC will likely cut its oil production next year as prices risk falling in reaction to higher output from top crude consumer the United States and amid a slowing of energy demand growth.

The Organization of Petroleum Exporting Countries decided to hold its oil output ceiling at 30 million barrels per day which stands about 1 million barrels per day below the cartel's actual production.

At a ministerial meeting in Vienna where OPEC is based its 12 member countries also chose to re appoint Secretary General Mr Abdullah El-Badri to head the group for another year after failing to agree on a new leader.

Mr El Badri said that "When you look at the price now, there is not concern at this time. I think the current price at USD 110 per barrel for benchmark Brent crude is acceptable for both producers and consumers."

OPEC said that the biggest challenge facing global oil markets in 2013 is uncertainty surrounding the global economy with the fragility of the eurozone remaining a major concern. World oil demand is forecast to increase slightly during 2013 but this is likely to be more than offset by the projected increase in non OPEC supply such as from the US.

Mr Karin Kneissl independent energy market analyst said that OPEC's overall interest is certainty in demand, and nobody can really tell whether this certainty in demand will be fully there.