The AP reports that Algeria’s minister for energy and mines has said that OPEC has essentially reached its production limit. Algeria is one of the 11 members of the Organization for Petroleum Exporting Countries.

“OPEC has reached its production limits. It doesn't have much production capacity,” [Chakib Khalil] said at the opening of an industrial plant in the western town of Arzew, according to newspaper reports on Saturday.

“If it came to a crunch, it has capacity for one million barrels (more per day), and I don’t think a production increase would influence the barrel price,” he told reporters on the sidelines of the ceremony.

Separately, OPEC president and Kuwaiti Energy Minister Sheikh Ahmad Fahd al-Sabah said the cartel was likely to maintain its output ceiling during its March 16 meeting in Iran despite soaring prices. (AFP)

“I think we will continue with the same ceiling” of 27 million barrels per day (bpd), Sheikh Ahmad told reporters when asked what he expected OPEC to do when it meets in the Iranian city of Isfahan next week.

“We have to be very careful because there is still overproduction,” he said.

Careful in that extended overproduction can damage the oilfields, leading to even more rapid decline.

In its latest forecast, the IEA forecast increasing demand on OPEC oil to meet global need. (Earlier post.)