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The global oil market will closely observe members of the Organization of Petroleum Exporting Countries this year as they maneuver to maintain prices and market share as demand fluctuates and geopolitical tensions affect production.
In December the organization agreed to raise its output target with the goal of reducing exports this year; reasoning that higher targets would influence individual countries to more closely comply.
Effective Jan. 1, output by all members excluding Iraq was set at 23 million b/d. This is up from an output target of 21.7 million b/d that stood for all of last year. The supply of crude from OPEC, including Iraq, far exceeded this target throughout 2002 (see table), averaging an estimated 26.3 million b/d in the fourth quarter.
Efforts at restraining production received assistance in December as political turmoil in Venezuela led to a strike that shut down exports. Venezuela produced an estimated 2.7 million bbl in November, so the loss of this alone put OPEC below the new output target, at least temporarily.
Additionally, Iraqi output could be interrupted as a result of a military conflict in that country Oil production in Iraq for December is estimated at 2.4 million b/d. In light of these events, OPEC has pledged that its other members will make up for any supply disruptions so as to prevent a shortage in world oil …