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March 30, 2017

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Iraq, Venezuela say OPEC to roll over output ceiling

VIENNA, Austria--The OPEC oil producers' cartel appeared set to maintain its output ceiling later this week, Iraq and Venezuela said in Vienna on Monday.

The OPEC (Organization for Petroleum Exporting Countries), whose dozen member nations together supply about one third of the world's crude, have a daily collective output target of 30 million barrels of oil.

"I have a feeling we are expecting to have another rollover," Venezuelan Energy Minister Rafael Ramirez told reporters in the Austrian capital, two days before Wednesday's OPEC gathering.

Iraqi Oil Minister Abdelkarim al-Luaybi agreed that the OPEC cartel appeared to be heading for another rollover, meaning that the output ceiling would remain at the level it has now stood at since late 2011.

"There are indications that there will be a rollover," added Luayabi.

OPEC, which groups together nations from the Middle East, Africa and Latin America, is set to stick by its output ceiling as supply tensions linked to global crises help keep crude prices high, analysts say.

Global Oil Prices Up

Global oil prices are about ten percent higher than at OPEC's last meeting in December, boosted by falling production from Libya — plagued by ongoing unrest — while Iran's output remains hit by Western sanctions over its disputed nuclear program.

World oil prices have also jumped this year on the back of escalating Russia-Ukraine tensions, amid fears that all-out civil war could strain global energy supplies further.

Libya's acting oil minister, Omar Ali ElShakmak, told reporters upon his arrival in Vienna that the nation's crude output was far less than its full potential.

ElShakmak said Libya's production was currently "less than 200,000" barrels per day, compared with its full capacity of 1.5 million.

The North African country's oil production has been crippled by ongoing unrest, despite the 2011 ouster of Moammar Gadhafi.

In order to alleviate the loss of Libyan crude supplies, Iran and Iraq are pumping out additional oil.

Luaybi added on Monday that Iraq was targeting crude production of 8.4 million barrels of oil per day after 2018.

Average crude production target stood at between 3.6-3.7 mbpd in 2014, according to Luaybi, while average exports for 2014 will stand at 3.0 mbpd.

Saudi Arabia reportedly stated last month that US$100 was a "fair price" for oil, indicating that the OPEC kingpin could also call for no change in the output ceiling.

Saudi Arabian Oil Minister Ali Naimi has stated that that "supply is sufficient" and there was "absolutely no reason" to raise the limit.

The International Energy Agency had urged OPEC last month to ramp up production to meet strong global energy demand this year, particularly from emerging markets.

Since the start of the year, global oil prices have rallied by about about US$10.

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