Opec loses influence in controlling oil prices

DUBAI: The continuing surge in oil prices is proving Opec’s limited influence on the market despite the cartel committing to increasing its production ceiling, analysts said.
“Opec’s role to shift prices is limited because of the weakness in its spare production capacity which, estimated at one to 1.5 million barrels per day (mbpd), constitutes heavy crude� that is not sought after by refineries, analyst Waleed Khaduri said.
However, the Organisation of Petroleum Exporting Countries (Opec) remains a sizeable force in the world economy, to which it provides 30 to 80 mbpd of crude, said Khaduri, chief editor of the Middle East Economic Survey (MEES), based in Nicosia.
Crude oil futures jumped to a record high closing on the New York Mercantile Exchange on Friday, as markets fretted over tight US supplies despite a decision to release small amounts from a strategic reserve.
The November contract for light sweet crude climbed 42 cents to $48.88 a barrel at the close. The latest price eclipsed the prior all-time record close on August 19 of $48.70 and neared the intraday record of $49.40 on August 20.
In London, the price of benchmark Brent North Sea crude oil for delivery in November gained 20 cents to close at $45.33 a barrel a day after reaching a new intraday record of $45.75.
Opec declared in Vienna on September 15 it was lifting its official production ceiling by one million barrels daily to 27 mbpd from November 1.
But the decision left markets unmoved and has so far failed to bring down prices.
“Opec does not have the capacity to influence the oil market... which did not react to its decision to increase its production ceiling,� said Kuwaiti analyst Kamal Abdullah
al-Harmi.