OPEC to Hold Quota After Oil Reaches $75 Saudi Target

OPEC’s success in more than doubling oil prices since a five-year low in December will probably persuade ministers to maintain production quotas after this week’s meeting.

Reducing shipments beyond record cutbacks last year would endanger the global economic recovery, the Organization of Petroleum Exporting Countries’ president said last week. Oil rose to $75 a barrel on Aug. 25, the price Saudi Arabian King Abdullah says is fair for consumers and producers.

“OPEC countries will be pleased by the price, which they couldn’t have anticipated back in January,” said Edward Morse, the head of economic research at LCM Commodities LLC in New York. “They won’t seriously consider deepening or extending the cuts at this stage. OPEC has taken a lot of oil out of the market, and it’s going to clear the market up.”

Ministers from Kuwait, Iran, Libya, Qatar and Iraq have in the past three weeks made similar comments to OPEC President Jose Maria Botelho de Vasconcelos, signaling they support existing quotas. The group won’t change output at the Vienna meeting, Agence France-Presse reported yesterday, citing comments by Iran’s OPEC Governor Mohammad Ali Khatibi.