Vienna, Austria | – Members of the Organization of the Petroleum Exporting Countries (OPEC) agreed Thursday to stick to the oil-producer group’s existing output target of 30 million barrels of oil a day, a decision that implies it will cut production from recent levels but stops some way short of the action needed to boost sagging global oil prices.
Asked about the decision of the OPEC meeting Thursday, Kuwaiti Oil Minister Ali Saleh Al-Omair said “No change.”
Sticking to its current production ceiling of 30 million barrels a day would involve an OPEC supply cut of around 300,000 barrels a day based on the cartel’s output in October.
Oil prices plunged on the news, with Brent crude down 3.2% to 75.26 a barrel.
A cut of that size would be less than needed to reduce the imbalances in global oil markets, caused largely by a slew of new oil supply from the U.S. and weaker global demand growth. Analysts have estimated OPEC would need to take 1 million to 1.5 million barrels a day off the market to support oil prices, which have fallen by more than 30% since the summer.
Moreover, it remains unclear how the group will enforce its own production target.