Official Predicts OPEC will not Reduce Production Capacity

TEMPO.CO, Jakarta - Iranian Deputy Minister of Oil, Rokneddin Javadi, predicted that the Organization of Petroleum Exporting Countries (OPEC) will not cut down its production capacity.

Previously, Iran and Venezuela have repeatedly requested to the organization to reduce its production capacity to prevent further drop in commodity prices. However, OPEC seemed to have no intention on slowing down production, especially after last November, when the organization's member countries decided to maintain oil production and managed to retain its global market share and forcing the United States to reduce its shale production.

Javadi said that Iran hoped that the export volume of crude could return to its initial level of 2.5 million barrels per day within the next three months.

Meanwhile, analysts predicted that the global oil market will continue to be over flooded with supplies as OPEC and the United States continue to increase its production capacity.

"Oil prices will exceed its fundamental threshold," said an analyst from Barclays. "We predicted that the prices of the West Texas Intermediate and Brent crude will be set at US54.42 and US$63, respectively."

Saudi Arabian Minister of Oil Ali Al-Naimi, previously stated that the country will continue to maintain its 10 million barrels per day oil production in relation with positive prospects presented by the Asian market. An OPEC senior delegation had said last week that oil prices will increase in the second semester of 2015 as demand increases while crude supplies decrease.

REUTERS