FT Alphaville » Opec compromised; Saudi Arabia becomes lone player

JBC Energy sums up the thrust of Thursday’s Opec meeting in one handy paragraph:

As expected, OPEC members decided to keep the current overall production ceiling of 30 million b/d unchanged during yesterday’s meeting. Lowering the ceiling was not an option as the group is currently producing at around 1.6 million b/d above the target. On the other hand, an increase would not have been accepted by the price hawks. Saudi Arabia was allegedly asked by other members to cut production and adhere to the overall ceiling. Due to the lower prices and the massive global stockbuild, we forecast that Saudi Arabia will decrease production in H2 to 9.5 million b/d, bringing the 2012 annual average down to 9.7 million b/d.

What was interesting, of course, was Saudi Arabia’s unenthusiastic response to being asked to cut production for the purpose of ensuring the group’s overall adherence to the Opec ceiling.

* username: rupertbu