Opec to retain oil production levels

The head of Opec has stated that oil production will not be cut despite falling oil prices.

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By :  ,  Financial Analyst

Falling oil prices will not prompt a cut in oil production levels, the head of the Organization of Petroleum Exporting Countries (Opec) has stated.

Speaking in Dubai, Abdallah Salem el-Badri, secretary general of the oil producers' cartel, explained that an issue such as price would not dictate the oil output of the member nations. Prices have fallen dramatically since the beginning of the year with Brent crude dropping to $62 (£39) on Friday (December 12th) marking a five-year low.

Opec members met in Vienna in November about a potential reduction in output. The likes of Saudi Arabia, United Arab Emirates and non-member Russia had opposed any rise. The latter relies heavily on revenues from oil exports and is teetering on the brink of a recession if its economic performance does not improve in the next quarter.

The decision was taken to keep output levels untouched and Mr el-Badri confirmed there would be no wavering in this decision despite continued falls in prices. He added that the move was not designed to undermine other oil producers.

Mr el-Badri said: "The fundamentals should not lead to this dramatic [in price]. Some people say this decision was directed at the United States and shale oil. All of this is incorrect. Some also say it was directed at Iran. And Russia. This also is incorrect."

While nations such as Russia have noted their concern about the falling oil prices it has been a respite for British motorists. The falling prices has prompted a drop in petrol cost with the UK government confirming a drop of nine per cent from the summer high of 131.11p per litre to 119.83p. Diesel has also dropped from 136.22p to 124.79p during the same period.

These falls represented the lowest petrol prices in the UK for four years and provides a bit of relief for motorists.

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