OPEC assured world oil markets on Sunday that it was keeping them well supplied and holds enough production in reserve to meet higher demand this winter.
Cartel chief Sheikh Ahmad al-Fahd al-Sabah also said OPEC was unlikely to raise its formal limits on output to match the actual supply of 30 million barrels per day (bpd) and again suggested an official 27.5 million ceiling was irrelevant for now.
“I don’t think right now is the right time to speak about quotas,” OPEC’s president told reporters at an energy workshop.
“We now have over 30 million (bpd) in the market from OPEC. We will continue to focus on the market and will continue to supply the market.”
OPEC meets on June 15 to chart production strategy for the second half of the year.
Gulf oil producers have been raising output steadily since March to build a cushion of stocks ahead of the fourth quarter, when demand for OPEC oil is expected to rise to 30.5 million bpd.
The acting secretary general of the Organisation of the Petroleum Exporting Countries told reporters that stronger demand was a challenge the group’s 11 producers could meet.
“It is a challenge, but ... OPEC is well prepared to meet that challenge,” Adnan Shihab Eldin said on the sidelines of the workshop.
“30.5 million ... is well within our total production capacity. Our total production capacity is currently over 32 million, and it may even reach 33 by the end of the year.”
A wave of crude from the exporter group has already helped swell U.S. inventories and cool prices by 8 percent this week.
But Sheikh Ahmad, also Kuwait’s oil minister, indicated that crude prices, which have slowed demand for petrol in China and the United States, still have room to drop further.
“I think we are looking for the stability of the market, and $40 (for the OPEC basket) is an acceptable price for OPEC,” he said. OPEC’s reference crude basket last stood at $45.87, nearly $3 below U.S. crude marker West Texas Intermediate.
Claude Mandil, executive director of the International Energy Agency, welcomed higher supplies and hoped for lower prices.
“We have said that OPEC should produce more in order to supply the market, and that is what they are doing,” he told Reuters. “We hope prices will go down ... but I don’t want to give any target.”
OPEC vows to keep market supplied
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OPEC assured world oil markets on Sunday that it was keeping them well supplied and holds enough production in reserve to meet higher demand this winter.
/ Source: Reuters
