The Organization of Petroleum Exporting Countries said that global oil supplies are outpacing demand levels, keeping its forecast for world consumption this year unchanged.
OPEC, scheduled to meet next month, is producing 8.3 percent more crude than it considers necessary this quarter, data released today by the Vienna-based group show. This has helped inventories in developed nations to reach “comfortable levels,” equivalent to about 59 days worth of consumption, according to an e-mailed report.
“Higher OPEC crude oil production underscores the current trend of plentiful supply in excess of market requirements,” OPEC’s secretariat said in its Monthly Oil Market Report.
Brent crude futures have fallen 10 percent in the past two months, trading today at $113 a barrel, as Europe struggles to resolve its debt crisis and the global economic recovery sputters. Still, Saudi Arabian Oil Minister Ali al-Naimi said on May 8 that prices are too high while the organization’s Secretary-General, Abdalla el-Badri, said last week that OPEC will work to bring them down.
OPEC, responsible for 40 percent of global oil supplies, said in the report it bolstered production by 320,000 barrels a day in April to 31.62 million, led by increases in output from Iraq. Saudi Arabia increased supply by 56,500 barrels a day to 9.9 million, according to OPEC estimates which are based on secondary sources.
The world will consume 88.7 million barrels of crude a day this year, about 900,000 barrels a day or 1 percent more than in 2011, the organization said. That’s 40,000 barrels a day higher than the group projected in last month’s report.
April’s production level is about 2.4 million barrels a day more than the 29.2 million that OPEC estimates its 12 members need to provide in the second quarter. The organization forecasts it will need to supply 30.9 million a barrels a day in the third quarter. For 2012, it estimates that 30 million barrels a day are required, in line with the formal quota agreed at the group’s last meeting in December.
OPEC also boosted its estimate for production from outside the organization in 2012, by 50,000 barrels a day. Non-OPEC suppliers such as Russia, Canada and the U.S. will increase output by 600,000 barrels a day this year, to 53 million a day.
“Taken together, higher non-OPEC supply and rising OPEC production has resulted in total supply exceeding market needs in the first quarter,” the organization said.
The group’s members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. OPEC will next meet on June 14 in Vienna.
The International Energy Agency, an adviser to consuming nations, will release its own monthly report on global oil supply and demand levels tomorrow.
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