OPEC oil producers, at odds over supply policy since June, look set at a mid-December meeting to agree a new production target that legitimises current cartel output at 30 million barrels a day.
OPEC’s leading price hawk Iran, appears to have given up its campaign to have Gulf Arab nations including top producer Saudi Arabia cut back supply.
Iranian Oil Minister Rostam Qasemi told Reuters on Monday that Tehran would be guided by the recommendations of the cartel’s Vienna-based secretariat.
"All OPEC members should really follow those OPEC recommendations because the secretariat is expert," said Qasemi in an interview in Doha.
"This meeting there will be an agreement, I think. We don’t have big differences, really."
Qasemi met with UAE Oil Minister Mohamed al-Hamli at an industry conference in Qatar on Wednesday in a bid to try to mend fences with one of the three Gulf Arab producers, a close ally of Saudi. No numbers were discussed.
But delegates say OPEC’s Vienna-based secretariat will recommend to a meeting of OPEC national experts, its Economic Commission Board, ahead of the December 14 ministerial meeting that 30 million barrels daily is required from the group in the first half of 2012.
The secretariat is forecasting demand for OPEC crude at 29.9 million bpd in the first quarter and 28.7 million bpd in the second quarter, the annual period of slowest global fuel demand.
While the second quarter figure is well short of OPEC’s current output, the secretariat will argue that inventories, having fallen sharply this year, will need replenishing in the second quarter.
Gulf producers, including Saudi Arabia, are also expected to line up behind the secretariat’s forecasts.
"Normally the secretariat’s numbers if they are in line with the other leading forecasters are the proposal that it makes sense to follow," said a Gulf OPEC delegate.
OPEC sees average 2012 demand for OPEC crude at 30 million bpd compared to 29.8 million bpd from the U.S. Energy Information Adminstration and 30.4 million bpd from the Paris-based International Energy Agency.
Iran’s change of heart appears to reflect a desire to avoid a second meeting this year under its chairmanship, as holder of OPEC’s rotating presidency, that fails to secure a supply pact.
Until recently, the price hawks in the Organization of the Petroleum Exporting Countries had lobbied for a reduction in output to keep oil prices comfortably above $100 a barrel.
Led by Algeria and Iran, the hawks wanted Saudi Arabia and its Gulf Arab allies the United Arab Emirates and Kuwait to turn down the taps because supplies from Libya are resuming quickly.
OPEC at a rancorous June meeting was split between price doves and hawks and failed to agree a deal for the first time in decades.
The division left the cartel without a production target which if repeated at the meeting later this month would send the group into a year of sluggish global growth without any restrictions on supply.
"Of course we want an OPEC agreement," said the Gulf delegate. "But it has to be reasonable and based on a realistic forecast for demand."
Gulf producers would be happy to see prices $10-$20 lower than the $111 a barrel now for Brent crude.
The UAE’s Hamli said recently that an ideal price was $80-$90 a barrel – less of a burden on consumers but still enough to finance new oil investment.