Opec maintains production output
THE tanker industry breathed a sigh of relief over the weekend when the Organisation of Petroleum Exporting Countries decided not to cut oil production in the second quarter of this year. The cartel met on Sunday to outline an output strategy for the next three months and decided to enforce the existing production targets set at the end of last year. There were fears that another cut in oil exports would put more pressure on tanker rates, especially for ships operating out of the Middle East and Africa. Since September last year, Opec has cut production targets by 4.2m barrels per day to halt the slump in oil prices from more than $140 per barrel in July to $45 per barrel this month. “The good news is Opec decided not to hold another round of cuts and will maintain their current production quotas,” said brokers with Imarex Asia. “There should not be any massive demand destruction [for tankers]. However, Opec will still aim to focus more on enforcing existing production cuts.” Analysts said Opec could still reduce output levels by 800,000 bpd to comply with the cuts agreed in December 2008. Production cuts would also have affected demand for liquefied petroleum tankers as LPG is a by-product of crude and gas production operations in the Middle East.
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