Iran to Raise Oil-Surplus Concerns at OPEC Meeting
DUBAI (Zawya Dow Jones), Aug. 26, 2009
Iran will seek to discuss how to address an expected overhang in crude oil supplies when OPEC meets Sept. 9 in Vienna, Iran's OPEC governor said Wednesday.
Demand for oil produced by the Organization of Petroleum Exporting Countries is expected to be around 28 million barrels a day in the first quarter of 2010, which suggests a supply surplus if OPEC production remains at current levels, Iran OPEC governor Mohammad Ali Khatibi told Zawya Dow Jones by telephone.
Secondary sources estimated OPEC's production in July was around 28.7 million barrels a day, Khatibi said.
"If OPEC continues this production, stockpiles will build by 700,000 barrels per day, so this will be brought to the attention of ministers," Khatibi said.
Total oil output by OPEC's 12 members rose by 0.9% in July versus the previous month, according to Dow Jones' July OPEC survey, based on input from analysts and government sources.
The 12 countries pumped a total of 28.535 million barrels a day in July, 250,000 barrels a day more than in June, mainly due to increased production from Saudi Arabia and Nigeria.
Iran produced more than 414,000 barrels a day above its target during July, making it the group's least compliant member, the survey showed.
Qatar's oil minister Abdullah bin Hamad Al Attiyah, however, said Wednesday that OPEC will likely keep output quotas unchanged at the September meeting.
"OPEC may extend the rollover because the market situation needs this to balance demand and supply," Al Attiyah said in a telephone interview.
In recent weeks, some officials from OPEC, which produces about 40% of the world's oil, said they are happy with oil prices around $70 a barrel.
Benchmark oil prices hit $75 a barrel Tuesday in New York for the first time in 10 months, before falling sharply ahead of new inventory data in the U.S. and settling at $72.05 a barrel.
Based on various forecasts including OPEC's own data, demand for oil is set to increase by between 500,000 and 1 million barrels a day in 2010, Khatibi said. But "non-OPEC production will also increase and absorb part of this demand," he said.
The Iran OPEC governor said he expects non-OPEC supply will increase by between 400,000 and 500,000 barrels per day.
Last week, the International Energy Agency revised its forecast for 2009 world oil demand slightly higher on improved Asian economic activity, but said non-OPEC countries like Russia are pumping more crude, which will mostly offset the added rise in consumption.
The Paris-based agency said it expects 2009 global oil consumption, led by growth in China, to average 83.94 million barrels a day - representing an upward revision of 190,000 barrels a day from the IEA's July report, but a 2.7% drop from last year.
Copyright (c) 2009 Dow Jones & Company, Inc.
- OPEC's Output Curbs Squeeze World's Biggest Oil Refining Complex (Oct 16)
- Russell: China Crude Oil Storage Splurge Is OPEC's Best Friend (Oct 16)
- OPEC Is Said to See Oil Inventory Glut Finally Gone in One Year (Oct 12)