OPEC countries cannot ask for better oil market conditions than the current ones which represent very preferable and stabilized oil market conditions in terms of oil prices, oil supplies and oil demand. According to these good market conditions, OPEC- member states met yesterday (Friday) at the 163rd ordinary oil ministers meeting in Vienna to discuss less hot pending issues, but definitely not related to changing the bureau production strategy and quota or the oil prices. Oil prices had averaged at relatively good high level of $103 per barrel for Brent crude and $100-101 for OPEC basket respectively for the second month in a row (April and May 2013) despite the small increase in OPEC production from 29.93 million barrels a day in March to 30.21 million in April and the OECD (Organization for Economic Cooperation and Development) small demand decline. This preferred market conditions and price stability is a good indication of the success of OPEC production strategy and its members' best adherence to its production quota since many years. Accordingly, the ministers are not expected to discuss changing the organization production and quota regardless of the US oil production increase from its unconventional resources, Iraq future plans to boost its production, Middle East security issue with respect to the civil war in Syria, and finally Iran oil embargo. Looking at the stability of the market in the last few months, it is so clear that these factors had minor impact on the oil market and future prices at least in the short term. Iran oil embargo was expected to have major impact which did not happen in the last months due to the success of Iran in finding new customers for its oil especially in Aisa. According to OPEC strategy, the market is expected to absorb any minor change whether increase or decrease in demand/supply specially coming from non-OPEC oil producing countries. This market optimism is so obvious especially when listening to the many press briefs made in the few weeks by several OPEC countries oil ministers. For example, Mr Ali Naimi, the Saudi oil minister, indicated that the current conditions are the best environment for the oil market and added that demand is great and the Kingdom welcomes new oil supplies. Such announcement from the largest oil exporter and biggest influential member of OPEC countries has a lot of weight and positive indication of the potential outcome of this Friday meeting. Basically, Mr Naimi is saying, more or less, the boat is moving in the right direction, so let's not rock it. Having said that, I believe that OPEC countries need to address some of the biggest challenges facing them in the short and long terms. The long term challenges including setting up a strategy that would address long term future threats such as the possibility of the US plans succeeding in boosting its production in the next 20 years to significantly offset its oil import and the possibility of Iraq & Venezuela plans succeeding to significantly boost their production capacity in the next few years. Both scenarios are far to be realized in the short term with much higher probability in the long term. In addition, OPEC has several short term pending and hot challenges that need a kind of consensus between the organization members such as the position of OPEC's secretary general; a debatable issue that lasted few years resulted in no unanimous agreement on the Iranian and Saudi candidates which resulted in an interim solution extending the term of the existing organization secretary Abdalla S. El-Badri. — Dr. Sami Al-Nuaim is a Saudi writer and can be reached on Twitter: @neaimsa. His articles can be read at www.saudienergy.net
