LONDON, July 2 -- The Organization of Petroleum Exporting Countries appeared to set to leave its output levels unaltered when it meets Tuesday in Vienna for its second extraordinary meeting in the last month, despite the continued halt to crude exports out of Iraq.
However, should the decision to stand by OPEC's collective 24.2 million b/d production quota be ratified by the 10 voting member states' ministers, it would fly in the face of warnings from many oil industry observers.
"Whatever the uncertainties caused by the suspension of Iraq's oil exports and the impact of the global economic slowdown on oil demand, there is no doubt that the world will need more oil from OPEC in the third quarter," said London-based analyst the Center for Global Energy Studies.
"Refinery runs in Europe and Asia are set to rise by over 2 million b/d by the fourth quarter, putting increasing pressure on crude oil prices unless supplies are increased soon," added CGES.
The Center believes a refusal by OPEC to increase production now would result in crude prices climbing above $30/bbl again this coming winter.
OPEC Sec. Gen. Alí Rodríguez Araque was reported Sunday as saying that the organization did "not see any necessity" to up its output when global crude inventories were so high.
Tomorrow's meeting was arranged at OPEC's last ministerial conference, on June 5, when Iraq's export suspension -- a backlash in protest against the United Nation's decision to extend its oil-for-food program for only 1 month -- had just begun. At the time, some ministers had expressed concern that the organization act to balance the world's crude market.
"Should Iraqi oil exports remain suspended until the end of the year, OPEC will run up against capacity constraints over the winter if it does not act soon to raise output," CGES cautioned, "both to make for the lost oil and boost the organization's overall output to meet rising refinery demand."
The International Energy Agency's forecast for oil product demand for the year stood unchanged at 76.55 million b/d on June 12.