OPEC is in violation of their production limits in six years, which indicates major suppliers in the world is ready to pump more oil next year as manifestations of oil towards $ 100 a barrel.
The Organization of Petroleum Exporting Countries excluding Iraq pumped 26.78 million barrels a day this year, exceeding the quota by an average of 1,934 million per day, the highest since 2004. Crude oil rose 11 percent in 2010 as demand recovered, trading at around $ 90 for the first time in two years. Options to purchase at $ 100 this December is near a maximum of five months.
Any violation allows OPEC quotas, which provides about 40 percent of world oil, increase profits without changing the objectives set out in the first global recession since the Second World War, caused prices to fall by 78 percent. Analysts say the merger may lead to the 12 - member group to increase production next year after leaving quotas unchanged at its meeting this weekend in Quito, Ecuador.
"It's definitely $ 100, which would be a trigger," said Leo Drollas, the London-based director and chief economist at the Centre for Global Energy Studies, a market researcher founded by former Saudi oil minister, Sheikh Ahmad Zaki Yamani. "The bells are ringing in the halls now. If this continues, if it is a very cold winter, we can see the starting prices of $ 100. At some point even the Saudis will notice that something is happening here, and they must respond. And they will. "
Forecasts Increased
OPEC has maintained a production target of 24.845 million barrels per day since December 2008, the longest period that the fees have remained unchanged since it was first used in 1982. The 11 members with quotas pumped 26.7 million barrels a day last month, 1.9 million more than expected.
Wall Street is raising their price forecasts for crude next year after the New York Mercantile Exchange reached $ 90.76 a barrel on 7 December, the highest since the October 8, 2008. Futures for January delivery settled at $ 87.79 a barrel on 10 December. Oil is 30 percent lower this year on May 20, though 40 percent from a record $ 147.27 on July 11, 2008.
"We are more inclined to believe that Saudi Arabia will act responsibly and to encourage OPEC to increase production early next year" to avoid an increase in oil prices, Francisco Blanch, head of commodities research at Bank of America-Merrill Lynch in New York, said in an e-mail after the meeting in Quito.
Goldman Sachs Group Inc. said Dec. 1 that oil will average $ 100 in 2010 and $ 110 in 2012. In June last year, Goldman predicted oil would rally to $ 85 in late 2009, although that level was not reached until April. JPMorgan Chase & Co. said on December 3 oil averaged $ 93 in 2011, increasing its estimate of $ 89.75, and reach $ 120 before the end of 2012.
Increased revenue
"OPEC will have sequentially higher revenues to pay for increased social investment and energy costs, led by JPMorgan analyst Lawrence Eagles based in New York wrote on 3 December. "If the world economy can handle, allowing the price range acceptable to intensify both 2011 and 2012."
The options give investors the right to buy futures at $ 100 in December 2011 rose to $ 7.10 on 7 December, the highest price since August, according to Nymex trading. That an average of $ 6.39 this year. There are 44,981 outstanding contracts, the largest open interest for any oil contract options in New York.
Higher prices are a tax on consumers that may prevent growth, Blanch wrote in a report of 17 October. Each increase of $ 10 per barrel, adding 42 billion U.S. dollars of imports cost U.S. $ 49 million in Europe, $ 19 billion for China and $ 16 million to Japan, he said.
"Within two weeks of oil is $ 100, I think it would be more pressure from consumers in the nation of OPEC" to increase production, said Ann-Louise Hittle, an analyst at Wood Mackenzie in Boston. "Their number one concern is not greatly damage the economic recovery is underway."
Consumer Confidence
Confidence among U.S. consumers increased more than expected in December to the highest level in six months at the same time, Americans began to increase holiday spending. The index of Thomson Reuters / University of Michigan preliminary consumer sentiment rose to 74.2 from 71.6 in late November.
The stock of the Organization for Economic Cooperation and Development of Nations fell unexpectedly in the third quarter, down 11.5 million barrels, according to the International Energy Agency, compared with five-year average gain of 38.6 million dollars for this period. The demand growth last quarter was "giddy" with North America "very strong," said Paris-based agency in a report by 10 December.
"In a context of much stronger than expected growth in global oil demand and oil prices over two-year highs, OPEC may come under pressure to increase supplies to the market in the new year," said IEA in its monthly Oil Market Report.
Forward Curve
The narrowing gap between prices for different maturities futures has pushed the market into backwardation called, where as soon as possible the delivery of oil is more expensive than months later. This is another sign of falling reservations oil unit, according to Adam Sieminski, chief energy economist at Deutsche Bank AG.
The drop in inventories to make statements "more sustainable," wrote the Washington-based Sieminski December 3, 2011 to raise the average forecast of $ 87.50 a barrel from $ 80.
Crude for December 2011 delivery traded at $ 90.55 a barrel on the Nymex at 9:59 am London time, 84 cents more than the future in December 2012. It was 87 cents less than the contract for 2012 on 30 November.
OPEC meeting in Quito for two days was the seventh meeting without changes in production quotas. The group meets next June. Asked what price level is adequate, Saudi Oil Minister Ali al-Naimi, told reporters: "How many times do I have to say. $ 70 to $ 80 is a good price."
'Fundamentals Wrong'
An increase of $ 100 may indicate "something wrong with the fundamentals" of the market and bring OPEC to act, Abdalla El-Badri, secretary general of the organization, said on 9 December.
Venezuelan Energy Minister Rafael Ramirez told reporters after the meeting ended December 11 that $ 100 is "fair" and that he expects oil to reach that level next year.
The higher prices rather than increased production could help Iran, can not lift the exit as fast as other nations, and Venezuela, whose deposits of heavy oil more expensive to drill, according to Wood Mackenzie's Hittle.
Iraq accounted for 54 percent of the increase in supply capacity of OPEC in the six years prior to 2015, according to the IEA, to replace Iran as the biggest producer after Saudi Arabia.
Saudi Aramco, the largest state-owned oil company, will start pumping 500,000 barrels a day from its field Manifa in 2013, CEO Khalid Al-Falih said in Dubai on 08 December. The kingdom has the capacity to pump 12.08 million bpd, which is now using 8.3 million barrels a day, IEA data show.
Over $ 100
"I do not think you'll Saudi Arabia to start eating out of the reserve capacity until the inventory below the average of five years or oil prices go above $ 100 a barrel," said Kjus Torbjoern analyst oil in the market for DnB NOR in Oslo.
OPEC members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, UAE and Venezuela. Iraq is exempt from the quota system.
The group agreed on a disk outage 4,200,000 barrels per day in late 2008 in response to the recession. Adherence to this commitment reached 89 percent in March 2009 and was 56 percent last month.
"They could raise fees and a half million barrels a day and, in theory, no matter," said Sieminski. "Do not change anything. They would still be producing more of its objectives."
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