OPEC member countries meet Wednesday night (Australian time) and no change is expected to the current 24.845 million barrels a day production quota.
The world’s major oil producers hold their first meeting of the year in Vienna.
Oil prices have traded in a range of around $US68 to $US83 a barrel since late last year. Prices slid under $US80 a barrel overnight, down more than $US2 a barrel in a couple of days.
The strength of global prices has a lot to do with the rising demand from China where demand is up more than sharply in the past year.
Without this heavy buying from China (which is the world’s 4th biggest producer), prices might be $US20 or more a barrel lighter.
As world prices have risen once again past $US80 a barrel, there have been more reports of quota cheating by OPEC members, such as Nigeria, Angola and Iran
The issue is of such concern that Gulf States and OPEC members from North Africa could make this a major issue at the conference.
During the Vienna meeting, OPEC members aren’t expected to make any changes in the cartel’s daily output quota of 24.845 million barrels.
Maintaining policy stability and consistency, according to Hunter, has stood in contrast to a number of other shifting parameters – stocks, demand fiscal stimulus packages and wider economic growth.
Indeed, OPEC members – Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela – have been obtaining prices above budgeted figures.
Consumers in developed economies seem content, judging by the sharp fall in sales of some small and economy cars in markets like the UK in recent months. Sales of small efficient diesel cars have dropped dramatically in Britain.
In its monthly bulletin for March, OPEC said it expected world demand to grow by 900,000 barrels a day this year following a contraction of 1.4 mb/d in the previous year.
"This represents an upward revision of 0.1 mb/d from the previous assessment.
"Oil demand has been highly dependent upon the pace of the global economic recovery.
"OECD demand is still expected to remain at negative growth around 0.15 mb/d, while non-OECD demand is projected to grow by 1.0 mb/d, driven by China and the Middle East region.
"Demand for OPEC crude in 2009 is estimated at 29.0 mb/d, around 0.2 mb/d higher than in the previous report.
"This still represents a decline of around 2.2 mb/d compared to the previous year.
"In 2010, the demand from OPEC crude is expected to average 28.9 mb/d, around 0.2 mb/d higher than in the previous assessment and a decline of 40,000 b/d from a year earlier," OPEC said.
On Friday the International Energy Agency revised up its global demand forecasts for both last year and 2010 by 70,000 barrels a day.
The IEA now expects global oil demand to reach 86.6m b/d this year, an increase of 1.8% or 1.6m b/d versus 2009.
Global demand in 2009 was revised up to 85.0m b/d, a fall of 1.4%, or 1.2m b/d, compared with the previous year.
The IEA said Asia alone would provide more than half of global oil demand growth this year with China accounting for almost two-thirds of that increased demand from the region.
