OPEC output level to stay the course

LONDON: OPEC is widely expected to maintain its official oil production quota when it meets this week, with the cartel satisfied with the current level of crude prices, analysts said.

The Organisation of Petroleum Exporting Countries (OPEC), whose member countries together pump about 40 per cent of the world’s crude oil, will likely keep its

official quota at 24.84 million barrels a day when it meets

on Wednesday. “At the next OPEC meeting, changes in policy will not be necessary,” with prices expected to remain at a ‘reasonable level’ of between $70 and $80, president, Ecuadoran oil minister Germanico Pinto, said.

Ahead of the meeting in Vienna - home to OPEC headquarters - the International Energy Agency said emerging markets were driving growth of world oil demand this year, with a big boost from China.

However the IEA also warned that demand for oil, a strong indicator of economic activity, would not recover in advanced economies overall in 2010. An increase in demand as nations recover from deep recession is being offset by high levels of energy stockpiles, which in turn is preventing prices from pushing far beyond $80, according to analysts. “It would be hard to justify further gains from here unless we see persistent stock draws (falls),” said VTB Capital analyst Andrey Kryuchenkov.

He added that while OPEC is set to leave its official output quota unchanged on Wednesday, it may pledge to improve compliance with target level.