Ali al-Naimi says OPEC will not cut production

The Organisation of Petroleum Exporting Countries (OPEC) decided on Thursday to maintain its current “official” output target unchanged, at 30m barrels per day, surprising analysts which had expected at least some token action to be decided upon to slow the slide in crude prices.

Thus, not only was the oil cartel's output ceiling maintained, no mention of a need for stricter adherence to it was made either.

The drop in Brent crude futures steepened on the news, to 3.5% to $75.05 barrel on the ICE, a level which some analysts have pencilled in as their target price for that benchmark of crude oil over the coming months.

Following the summit, Iran’s oil minister was cited as saying that the decision was not what his country “had wanted”.

That would seem to contradict reports on Wednesday evening suggesting that he and his Saudi counterpart had maintained “excellent” discussions ahead of the conclusion of the summit.

More poignantly, the United Arab Emirates' Energy minister, Suhail Al-Mazrouei, added: “The market is oversupplied [...] but the oversupply is not from OPEC”. Before today's meeting OPEC had engaged in an intense round of diplomatic contacts, in a bid to have non-OPEC producers such as Russia participate in any cuts, something which had not been observed for many years.

For his part, the organisation’s Secretary General went on to explain that no maximum or minimum price had been set at which OPEC would act.

Speculators at fault, they always are

Somewhat conspicuously, in a statement issued prior to the start of today’s meetings the oil cartel indicated that “a careful look” at the situation suggested the decline in oil prices may not be exclusively attributed to oil market “fundamentals” - in reference to what it called “speculative activity”.

The statement also referenced the impact on oil prices from a strengthening US dollar, while emphasising that the long-term sustainability of capacity expansion plans and investment projects may be put at risk by the retreat in energy quotes. The Organisation of Petroleum Exporting Countries (OPEC) decided on Thursday to maintain its current “official” output target unchanged, at 30m barrels per day.

Front month Brent crude futures initially retreated on the news, falling back by 3.5% to $75.05 barrel on the ICE, a level which some analysts have pencilled in as their target price for that benchmark of crude oil over the coming months.

Following the summit, Iran’s oil minister was cited as saying that the decision was not what his country “had wanted”.

That would seem to contradict reports on Wednesday evening suggesting that he and his Saudi counterpart had maintained “excellent” discussions ahead of the conclusion of the summit.

For his part, the organisation’s Secretary General went on to explain that no maximum or minimum price had been set at which OPEC would act.

Speculators at fault, they always are

Somewhat conspicuously, in a statement issued prior to the start of today’s meetings the oil cartel indicated that “a careful look” at the situation suggested the decline in oil prices may not be exclusively attributed to oil market “fundamentals” - in reference to what it called “speculative activity”.

The statement also referenced the impact on oil prices from a strengthening US dollar, while emphasising that the long-term sustainability of capacity expansion plans and investment projects may be put at risk by the retreat in energy quotes.