Opec 'may lift' output target at next meeting
While oil traders and industry watchers have all but ruled out the producer cartel cutting supplies when it meets on Friday, an increasing number of analysts are arguing the group might actually raise its output target.
While that's unlikely to directly lead to any more supplies in the market - Opec is already producing at least 1m barrels a day above its official target of 30m b/d - analysts say the odds of it upping it to 31m b/d or more are rising, deputy commodities editor David Sheppard writes.
Morgan Stanley analyst Adam Longson led the way on Monday, arguing in a note that "there is some risk the quota is moved higher" to bring it more in line with Opec's actual output.
Two other closely watched analysts, Olivier Jakob at Petromatrix and Vienna-based JBC Energy said similar on Tuesday morning.
Mr Jakob wrote:
It would not do anything to actual supplies but would re-enforce the message that OPEC will maintain its market share and would also legitimize the latest increase of production from Saudi Arabia to 10.3m b/d.
JBC Energy said it would also go some way to dispelling "some commentators' doubts of its (Opec's) relevance after the last meeting" when it decided to maintain output despite lower prices, as it looks to slow output from higher-cost producers.
Saudi Arabia's oil minister Ali al-Naimi arrived in Vienna on Monday night, telling the scrum of waiting reporters that Opec's strategy is working, with demand expected to pick-up in the second-half of this year and supply slowing.
"You can see that I'm not stressed, I'm happy," Mr Naimi said as he entered the gilded lobby of the Grand Hotel Wien in the Austrian capital, the city where Opec is headquartered.
"I don't have a crystal ball but it is (going) in the right direction," added.