OPEC oil exporters, basking in the market's equilibrium, were on course to leave output policy unchanged on Friday as oil held around the group's preferred level of $100 a barrel.
Oil ministers have said they expect the Organization of the Petroleum Exporting Countries to leave its 30 million barrels per day (bpd) output target unchanged for the rest of this year.
"I do not think the ministers will change the ceiling and they will discuss the secretary general in December," said a Gulf OPEC delegate just before the group meets this morning.
OPEC's choice of a new secretary general has stalled on competing candidates from Iran, Iraq and Saudi Arabia. Friday's meeting will merely approve the criteria for prospective candidates to come forward, delegates said. [ID: nL6N0DI1C0]
Saudi Arabia's Oil Minister Ali al-Naimi set the stage for a swift and easy deal when he arrived on Tuesday, saying he was happy with the current balance of oil supply and demand.
The Organization of the Petroleum Exporting Countries has little room to pump more oil due to the U.S. oil boom that has sparked competition for marketshare in Asia and set off a rivalry between its top two producers Saudi Arabia and Iraq.
A year ago, OPEC gave shale oil short shrift, but is now a hot topic. Gulf producers think that OPEC will still be able to pump at least 30 million bpd, provided U.S. shale grows at a moderate pace.
Despite growing supply, oil is comfortably above $100 a barrel, well below the $125 that rang alarms in major consumer countries last year.
But oil above $100 has also freed U.S. shale oil in North Dakota and Texas – which competes with OPEC crude of similar, light quality from Nigeria and Algeria, rather than heavier Saudi output.
Nigeria, along with Algeria, has already felt pressured by the U.S. oil boom, losing ground in its most lucrative export market and diverting sales to Asia.
Iraq is also fighting for more Asian market share, competing with regional rival Saudi Arabia. But Iraq's production and exports are not growing as swiftly as hoped due to myriad infrastructure and logistical hurdles.
Oil Minister Abdul Kareem Luaibi expects the country's oilfields to ramp up to about 3.5 million bpd by the end of the year, up 400,000 bpd on current rates.
When OPEC last met in December, he expected average production of 3.7 million bpd for this year. The more modest growth has relieved concern among core Gulf producers that Baghdad would capture their market share in Asia.
Gulf producers, led by OPEC power Saudi Arabia, are also sanguine about rising supplies of shale oil.
And the kingdom – holder of most spare capacity in OPEC -shows no sign of opening the taps to bring down prices and curtail that output by making it uneconomic.
Others within OPEC, including price-hawk Iran, are concerned about the potential for both slow global growth and a dramatic rise in U.S. shale oil to send prices tumbling.
