Major oil-producing nations say they will maintain their current levels of production in an effort to keep down crude prices. The announcement at a meeting in Venezuela of the Organization of Petroleum Exporting Countries,Thursday, came as no surprise to oil analysts. But OPEC did raise eyebrows with reports that the 11-nation group may add new members.
OPEC oil ministers meeting in Caracas, Venezuela, say they will retain their current production quota of 28 million barrels of crude a day. The cartel lifted output to that rate one year ago, in an effort to curb rising prices. But the cost of oil has continued to climb in recent months to more than $70 a barrel. As a result, many oil analysts were confident that OPEC would leave the quota unchanged for fear of triggering further instability on global markets.
Ahead of the meeting, Venezuela's government was the only member state to raise the possibility of trimming output, but other OPEC ministers rejected the idea. And the group's current president, Nigerian Oil Minister Edmund Daukoro, said countries are now looking at ways to expand daily capacity to 33 million barrels by later this year. "Where possible, our member countries have accelerated their plans to bring on stream new production capacity to meet continued demand growth and to re-establish a comfortable cushion of spare capacity," he said.
Another possibility for increasing OPEC production is to expand membership to other oil-producing nations. Officials said the topic was not on this meeting's formal agenda, but they said possible new members include Angola, Sudan and Ecuador, which quit the cartel in 1992.
The additions could help OPEC regain some of the market influence it has lost in recent years, says Jorge Pinon, a senior researcher at the University of Miami and former head of Amoco's Latin America division. But he says there is little incentive for prospective nations. "There's certainly no economic benefit. I don't see what is the economic benefit of a country joining OPEC. I think the only benefit could very well be for the point of view of political," he said.
Pinon says that the political benefits could include bringing more international clout to less-developed nations in Africa and Latin America. Still he adds that for years Mexico has resisted calls to join OPEC, in order to continue to be seen as a neutral oil-producing nation.
OPEC officials have yet to announce when formal accession talks could begin, and it's unclear if Angola, Sudan and Ecuador are serious about joining.