OPEC to Dig In, Won't Pump More Oil Pre-Summer
BALI, Indonesia May 17, 2007 (Dow Jones Newswires)
The Organization of Petroleum Exporting Countries will stand firm on its view that global oil markets are amply supplied and don't need an increased supply before the summer, a top official from the group said Thursday.
"There's no need for us to do more," Abdalla Salem El-Badri, OPEC's Secretary-general, told Dow Jones Newswires in an interview.
His remarks are the latest sign that OPEC wants to see crude oil stocks being drawn down more as a way to shore up prices.
El-Badri said U.S. gasoline stock levels are "acceptable" despite the industry's concern that inventories have fallen too low to meet the usual surge in summer demand.
The U.S. driving season unofficially begins with the weekend ahead of Memorial Day, May 28.
With the U.S. oil refining sector struggling with a string of technical troubles, gasoline stocks there have fallen well below the 210 million-barrel mark that analysts say will be needed to see the market through the summer.
In weekly data released Wednesday, the U.S. Department of Energy said stockpiles of the motor fuel rose 1.7 million barrels on-week to 195.2 million barrels, on higher domestic refinery output and imports.
But demand stood at a robust 9.4 million barrels a day, the data showed.
El-Badri is in the Indonesia resort island of Bali for two days of talks with consumer nations led by the International Energy Agency, the Paris-based energy watchdog of the Organization for Economic Cooperation and Development.
The discussions will be about the oil demand outlook in Asia rather than OPEC policy, he said - a reference to repeated calls by the IEA for OPEC to take the lead in supplying more crude.
The 12-member group currently pumps just over 30 million barrels a day, about 40% of global needs, according to Dow Jones Newswires estimates.
El-Badri also said it's too early to talk about the agenda for OPEC's next meeting, as members aren't scheduled to convene until Sept. 11 in Vienna.
"A significant rise in OPEC output appears unlikely to us at current prices," analysts at investment bank Barclays Capital, led by Paul Horsnell, warned in an overnight research report.
"Without that increase, we expect the market to overheat in the second half of the year."
Copyright (c) 2007 Dow Jones & Company, Inc.
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