Vienna: There are signs of increasing demand for oil, Saudi Oil Minister Ali al-Naimi said on Tuesday, which could mean Opec does not have to take any action on supply this year.
“We have been sailing very well and we will continue to sail very well,” Naimi, minister for the world’s top oil producer, told reporters on a morning run a day ahead of a meeting of the group, many of whose members have voiced concern it is pumping too much oil.
Kuwait’s oil minister Sheikh Ahmad al-Abdullah al-Sabah said on Tuesday compliance was “the major issue.”
Angola’s oil minister Jose Botelho de Vasconcelos said his country might ask to be exempt from its output quota as it continues to produce above that level.
But Naimi is more relaxed about overproduction.
“Compliance is there,” he said on Monday. “The market is happy , there is balance, there are no shortages, there is enough investment going on,” he added.
He said he did not think there would be a need for any additional OPEC meetings this year.
Opec is due to meet in September and December.
Algerian Energy and Mines Minister Chakib Khelil said on Monday Opec could wait until the second and third quarters to deal with the demands of a recovering economy.
“The economy is looking like it is recovering,” Khelil said. “I expect prices to hold pretty well until the end of this year despite the surplus in supply,” he told reporters.
Naimi said on Tuesday Opec would not reduce supply if it meant prices could be driven too high.
“We will never allow tightening that will put pressure on prices,” Naimi told reporters on Tuesday.
Oil prices are within a range which Naimi has described as comfortable for producers and consumers even as Opec pumps more than its 24.84 million barrels per day (bpd) target.
Benchmark US crude futures steadied just shy of $80 per barrel on Tuesday, after a fall of nearly 2% on Monday triggered by dollar gains and worries that China might tighten credit further.
Opec agreed to slash 4.2 million bpd from output in December 2008, as recession threatened to crimp oil demand.
In the past year, rising prices and a hesitant global recovery have encouraged Opec members to add supply to the market. In February, Opec delivered just 53% of pledged output curbs it agreed in late 2008 -- down from 81 percent a year ago.
The icing on Opec’s cake is that from here, demand could pick up enough to mop up the extra crude from its members as China leads a global economic recovery.
“The reason why the global economy is going to grow faster is because China and India are pulling very hard,” OECD secretary general Angel Gurria said as he forecast global growth of 4 to 4.5%.