Javier Blas has the word on Opec’s decision from Vienna:
Opec was on Thursday set to leave its production levels unchanged, betting that higher oil demand as the global economy recovers would push prices towards the cartel’s target of $75-$80 a barrel by the end of the year.
Speaking ahead of their meeting in Vienna, Opec delegates said ministers were expected to call for improved compliance with the cartel’s previous cuts.
Compliance in April was estimated at 80 per cent, down from 85 per cent in March.
Delegates said that the increase in over-production was a concern and ministers were likely to promise to cut back their pumping to agreed output levels, but left the official targets unchanged.
This was the majority view of analysts. Prices are down slightly right now; they also moved little immediately after the last meeting in March, which also opted to hold. But despite falling compliance, crude prices have steadily moved higher since then. So how well will compliance be enforced this time round? And given the inscrutable moves on the demand side, how much does it really matter anyway?
Opec set to leave output unchanged (FT, 27/05/09)