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03 March 2024

Opec: Current output enough to boost global stocks

By Agencies


Current Opec crude oil output should be enough to meet growing demand and boost global stocks, the group said on Friday, a possible sign that it could decide to keep supplies steady at its March 5 meeting.


Oil prices climbed to a one-month high above $96 earlier on Friday, drawing closer to the lifetime peak of $100.09 reached on January 3.


Opec ministers have repeatedly said the market was well-supplied, attributing oil's rally to an influx of speculative fund money and political tensions in the Middle East.


"Current Opec production at close to 32 million barrels per day should help to further ease market fundamentals, resulting in builds in global inventories over the coming quarters," it said in its monthly oil market report.


Analysts believed this was an indication that the 13-member group would not change its supply policy when it meets on March 5 in Vienna.


"If that is the way they see (the market), then it seems unlikely they will increase or decrease production. Steady is the most likely outcome," said Kevin Norrish, energy analyst at Barclays Capital.


Opec decided to keep its output steady despite calls from consuming nations to boost supplies and ease prices.




Opec projected world oil demand would increase by 1.23 million barrels per day, down 70,000 bpd from its January forecast.


The group, which pumps more than a third of the world's oil, attributed the decline to a slowing world economy, warm winter weather in the Pacific and weather-related disruptions in China over the New Year holiday.


"A sharp economic slowdown, especially in the United States, may further undermine demand growth in the coming months, mainly in transportation fuels," it said.


The International Energy Agency, adviser to 27 industrialised countries, also lowered its 2008 world oil demand growth forecasts this week to 1.67 million bpd, down 310,000 bpd from its previous estimate.


"Although Opec's demand growth projections are lower than other assessments for this year, one cannot rule out the potential for further downward revisions in the months ahead," Opec said.


The group estimated world economies will grow by 4.6 per cent this year, steady from January's forecast.


"Risks to the world economy have increased considerably in January on mounting evidence of a slowdown in the US economy, fuelling fears of an outright recession with uncertain repercussions for the rest of the world," Opec said.  (Reuters)