OPEC countries could not find consensus among its member countries for raising the production quotas. Saudi Arabia failed to convince the group to lift production.
Ali Al Naimi, oil minister for Saudi Arabia, said that the proposal was to increase the output by 1.5 million barrels a day to 30.3 million barrels a day. This also includes Iraq which is not bound by an Opec quota. However, the proposal was blocked by Libya, Algeria, Angola, Ecuador, Venezuela, Iraq and Iran commenting that they want to maintain the current level of production.
The opposing factors appeared political in nature. The continued political unrest in Middle East and North Africa is one factor. Another aspect is the diverging market view. Ecuador’s Oil Minister Wilson Pastor said: “We do not know what will happen with demand in the next few months.”
The failure of OPEC to meet consensus has resulted in a blow to industrialised consumer countries. The value of crude oil for July delivery rose by $1.65 to reach $100.74 a barrel on the New York Mercantile Exchange, while gasoline for July delivery fell by 1.32 cents to reach $2.9787.
OPEC plans to meet on December 14. Saudi Arabia will, however, raise output unilaterally.