OPEC holds oil output steady, sticks to same leader

OPEC on Wednesday maintained its oil output ceiling but had to reappoint Secretary-General Abdullah El-Badri to lead the cartel for another year after members failed to agree on a new leader.

As expected by markets, the Organization of Petroleum Exporting Countries kept its oil production ceiling at 30 million barrels per day (mbd), with crude prices remaining at high levels ahead of an expected drop in OPEC demand next year.

"We will hold" output, Saudi Arabian Oil Minister Ali al-Naimi said after a ministerial meeting in Vienna, home to OPEC's headquarters.

The ministers also voted to keep Libyan El-Badri on for one more year after the cartel's 12 members failed to agree on a replacement for the secretary-general who had been due to stand down at the end of 2012 after two three-year terms.

"We extended (by) one year for the secretary-general," Naimi told journalists.

"We have an experienced secretary-general in position. Extending it one year is a very, very, very good decision," he went on. The new term begins on January 1.

The world's biggest oil exporter Saudi Arabia had been battling against Iraq and political foe Iran to succeed El-Badri, who has steered the cartel through the financial crisis as its secretary-general since 2007.

"It's incredibly important to this organisation (to reach a decision on the position) because the secretary-general sets the tone and leads the organisation as we go forward," Nigerian Petroleum Minister Diezani Alison-Madueke had told reporters ahead of the decision to keep El-Badri.

A vote to pick El-Badri's successor was postponed in June after OPEC -- which produces more than one third of the world's oil -- had already failed to reach a unanimous decision among its nation members.

"Mr El-Badri has been a very, very good secretary-general," Madueke said on Wednesday.

OPEC members had failed to agree from three candidates -- Majed al-Moneef, a former Saudi governor to OPEC, ex-Iranian oil minister Gholam Hossein Nozari and former Iraq oil minister Thamir Ghadhban.

OPEC meanwhile agreed to maintain its output ceiling, which is in fact about one million barrels below its official daily target. OPEC is pumping out extra crude as Saudi Arabia compensates for lost Iranian output caused by Western sanctions on the Islamic Republic, and as other members look to maximise profits.

Benchmark crude oil prices rose above $108 a barrel Wednesday on supply concerns after OPEC reported a drop in crude production last month, traders said.

However an expected drop in demand for OPEC oil next year risks dampening crude prices despite a background of Middle Eastern unrest, notably over Iran's disputed nuclear programme.

OPEC "is unlikely to agree to cut back production as long as oil prices remain relatively healthy," said Tamas Varga, analyst at PVM oil brokers.

"The assumption will be that the Saudis, and perhaps the Kuwaitis, will cut back very quickly if prices start falling."

OPEC on Tuesday kept its forecast for growth in world oil demand unchanged for this year and next. World oil demand was expected to reach 88.80 mbpd in 2012, up from 88.04 mbpd in 2011, the cartel said in its monthly report.

The International Energy Agency released its own forecasts in Paris, raising its estimate for global demand in the last three months of the year to 90.5 million barrels per day, the same level seen for 2013 as a whole.

The oil market was undergoing "almost violent structural change" on two fronts, according to the IEA report, the first of which was "an apparent acceleration in the eastward shift of global oil demand growth.

"Emerging markets continue to dominate growth, a trend that has become deep rooted having commenced around the turn of the millennium," the agency said.

The second major shift was accelerating globalisation of the refining industry, it added.

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