OPEC: Steady as she goes

As the stage was set up at Vienna to host OPEC, it was clearly seen that two views were running hard and fast from the very beginning, within the oil exporting countries. On one side Iran and Venezuela were ardent that oil prices should be firmed up to help boost revenues for the exporting countries. On the other hand, UAE and Saudi Arabia among others urged that steeper oil prices may quell the faint signs of global economic recovery. During the meeting Saudi Arabia was under intense pressure by other countries to cut down its production of oil to stop further slide in the crude prices. Iran, which has seen its oil exports slide after being slapped with sanctions by the US and Europe, lobbied Saudi Arabia not to use the oil weapon against it by increasing supplies to countries that no longer get Iranian crude. The former appears to have succeeded in convincing other members of OPEC, as the cartel will stick to its production limit of 30 million barrels a day; a move they hope will halt the decline of oil prices following weak demand from China, US and EU. But oil prices may weaken all the same, given the apparent jitters ahead for the EU. "Germanys resources are not unlimited," Angela Merkel warned the German Parliament, highlighting that the current crisis in the EU will likely dominate this weeks G20 summit in Mexico. She said that the causes of the weakening global economy are indeed not only in the EU; in fact everyone must be prepared to overcome their specific weaknesses. She called on the US to reduce its budget deficit and urged China and other newly industrialised countries to allow their currencies to be more flexible. Free trade between G-20 nations is still limited, adding that "the G-20 economies haven taken their obligation to promote free trade seriously enough". The OPEC meeting at Vienna was focused on setting a rational limit on total oil production, keeping in mind the economic slowdown in major economies contributing to weak oil demand, and also on the issue of just how much Iranian oil will leave in the coming month in the oil market due to international sanctions on the Islamic Republic. Vienna did comfort Iran on the oil prices. The Wall Street Journal quoted Iranian Oil Minister Rostam Ghasemi, who expressed satisfaction with oil prices ranging between $100 and $120 a barrel. "If prices go down further, definitely we will have a meeting," he said. The EU-imposed embargo on Iranian oil goes into effect in July. So in a dozen days, oil markets and OPEC may soon be back to the negotiating table, as the noose on Iranian exports tightens further.