OPEC President Edmund Daukoru said Friday that the global oil market is oversupplied by about 2 million barrels per day.
“The market is indeed well supplied with crude today,” Daukoru told an audience at the National Press Club in Washington, ahead of next week’s meeting of the Organization of the Petroleum Exporting Countries.
Daukoru’s view that the global market has plenty of crude oil differed with that of the United States, the world’s biggest oil consuming nation, which believes the market needs more oil.
U.S. inventories of gasoline, which account for 40 percent of America’s daily oil demand, are the highest since June 1999 and Daukoru has said those big stocks will be a factor at next week’s OPEC meeting.
U.S. Energy Secretary Sam Bodman said he does not know what OPEC ministers will decide about their production levels when the cartel gathers in Vienna. However, Bodman said during his meeting on Wednesday with Daukoru that OPEC’s oil was needed based on high prices.
“I expressed the view that as best I could tell the markets were calling for more, not less, oil,” Bodman told reporters in a briefing earlier on Friday.
Even though crude prices have stayed high, Bodman said there are no signs the global economy is “suffering in any major way” due to oil costs.
U.S. oil for delivery in April settled on Friday at the New York Mercantile Exchange at $63.67 a barrel, up 24 cents, to near a three-week high as the unresolved dispute over Iran’s nuclear program and al-Qaeda threats to oil facilities in Iraq and Saudi Arabia kept traders on edge.
Daukoru, who is also Nigeria’s petroleum minister, said OPEC’s spare oil production capacity of 2 million barrels a day has not been able to counter oil price swings caused by market concerns about supply disruptions.
“We don’t believe that that (spare capacity) is having an impact, if you judge by the prices,” he said.
Daukoru said if world oil prices persist above $60 a barrel, “we will definitely take that into account” at the OPEC meeting on March 8.
He also said the cartel will “most likely” meet again after the March 8 meeting, but before another OPEC meeting planned in June, to review the cartel’s oil output.
Separately, Daukoru dismissed as “just talk” threats by militants in his country against Nigeria’s oil infrastructure. Nigeria is the world’s eight largest oil exporter.
The Movement for the Emancipation of the Niger Delta this week released six of nine foreign oil workers being held as hostages, but said it will concentrate its efforts on “one huge crippling blow to the Nigerian oil industry.”
“We’re not panicked,” said Daukoru.
