This decision was announced by OPEC president Purnomo Yusgiantoro and means cartel members can now exceed the group’s production quota of 23.5 million barrels per day.
OPEC had just announced last month it would cut its production ceiling by another 1 million bpd.
According to Purnomo, “The group [is] ignoring its production ceiling to stabilise the currently high oil price. Current oil prices did not reflect any supply/demand imbalances.”
“OPEC is firm in its policy to allow leakage. We allow the leakage [in order] to stabilise the currently high oil price,” he added.
In a statement the cartel’s secretariat said, “[Our] 10-members with quotas pumped an average 25.945 million bpd in March, close to 1.5 million bpd more than the 24.5 million bpd ceiling which prevailed at the time, and nearly 2.5 million bpd more than the new ceiling.”
It is too early to tell how the over-shoot will affect the market but, at press time, crude oil prices continued to rise with the price of light sweet crude reaching US$37.90 per barrel while the Brent benchmark crude recorded US$34.30 per barrel.
