Opec keeps output target below forecast demand

The Organisation of Petroleum Exporting Countries, which supplies about 40 per cent of the world's crude, kept its production target unchanged in a widely anticipated move that left the group's output below forecast demand for the rest of the year.

It reaffirmed on Wednesday its production ceiling of 30 million barrels a day for a fifth consecutive meeting. The group forecasts demand for its crude of 30.4 million barrels a day in the coming six months, while its 12 members produced 29.6 million barrels a day in April.

Opec ministers said at a meeting in Vienna that they were at ease with supply and demand in global oil markets.

While the formal limit remains unchanged, the burden will fall on Saudi Arabia to increase output to meet higher demand in the second half as political turmoil constrains Libyan output and sanctions curb Iranian exports, according to Barclays, Societe Generale and Energy Aspects.

"This meeting was to be a non-event and it is," said Olivier Jakob, the managing director of Swiss consulting firm Petromatrix.

"Saudi Arabia likes the lack of price volatility and the outright price. They want to keep it that way as long as possible."