"OPEC Strives to Adjust to New Economics of Oil Industry"

"VIENNA — The Organization of the Petroleum Exporting Countries is highly unlikely to agree to curbs on its members’ oil output at its meeting here on Friday, even though oil prices are about 40 percent lower than a year ago, OPEC officials and analysts say.

The meeting is the first since Saudi Arabia urged the 12-country group late last year to give up a decades-long policy of trying to manage prices through adjusting supplies of oil. For the Saudis, there are encouraging signs that the strategy of focusing on market share regardless of the impact on prices may be working. While still low compared with recent years, prices — now about $62 a barrel for Brent crude, the international benchmark — have risen nearly $20 a barrel from their January low of $45 a barrel.

The Saudis have also been able to increase production by 700,000 barrels a day since last year, and their Persian Gulf allies, Kuwait and the United Arab Emirates, have also increased output. In addition, low prices have prompted oil companies to postpone tens of billions of dollars worth of projects, production growth in the United States is flattening, and demand for oil, perhaps stimulated by lower prices, is strong, the Saudis say."

Stanley Reed reports for the New York Times June 5, 2015.