Iran says Opec unhappy over current crude price

Iran, Organisation of Petroleum Exporting Countries' (Opec) second largest exporter, yesterday predicted the cartel will maintain current oil output at its meeting next week, despite producers being unhappy with the prevailing price of crude.

"There is a feeling among Opec oil ministers that the group wants to maintain current ouput levels," Mohammad Ali Khatibi, Iran's representative to Opec, said ahead of Wednesday's meeting of the group in Vienna. "I think it is unlikely we will see any noticeable change. Based on comments already made by Opec ministers, the output ceiling will not change."

Opec, whose 12 members pump 40 per cent of the world's oil, agreed in late 2008 to remove a massive 4.2 million barrels per day (bpd) of output from the market in a bid to shore up crumbling prices.

Opec's official daily quota has stood at 24.84 bpd since January, but despite some signs of an economic recovery world energy demand still remains weak.

A vicious global economic downturn has brought down demand for energy, dragging crude prices from record highs of above $147 in July 2008 to $32 in December. They have since recovered to around $70 a barrel.

Opec members worst hit are those whose economies are highly dependent on oil exports, and Iran is no exception with 80 per cent of its foreign earnings generated from oil sales.

Anlysts say prices have picked up with tentative signs of a recovery in the world economy, but compliance with emergency cuts made last year to support prices has slipped. Iran and Angola are seen as the main culprits in exceeding their quotas, analysts say. Khatibi said Opec members were unhappy with the current oil price. "A good price is one when all producers, consumers and investors are relatively satisfied."

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