OPEC strategy working, says Saudi oil minister

The Saudis, who currently account for over a third of OPEC’s official output of 30m barrels per day (bpd), have been producing oil at record levels while upping exports to Asia at a small discount to OECD buyers. With the cartel tipped to hold its current production level, Al-Naimi remarked: “The market is stabilising, with the supply-demand scenarios being more balanced.”

Major Gulf producers Saudi Arabia, Kuwait, United Arab Emirates and Qatar held an informal meeting to discuss the market on Wednesday. While Al-Naimi made no reference to the meeting, a Kuwaiti source told Sharecast a change in the cartel’s quota level was “unlikely.”

At the last OPEC meeting on 27 November, 2014, Iran and Venezuela led an ultimately failed bid to force a production cut in an attempt to support the oil price. However, it was effectively vetoed by Al-Naimi with other Gulf producers in tow.

Speaking at the OPEC International Seminar, which precedes the ministers’ summit on Friday, Abdallah Salem el-Badri, Secretary General of OPEC, said it would likely be a “brief” summit.

"Market situation is quite clear," he quipped when asked about OPEC’s next steps.

Anecdotal feedback on the ground in Vienna points to OPEC pumping at historic highs for the next four months at the very least. According to its monthly report for April, the cartel pumped 30.93m bpd, nearly 1m barrels above its official output.

At 1424 BST, the Brent front month futures contract for July delivery was trading at $64.87 a barrel, down 62 cents or 0.95%.