Opec sees enough oil supply, holds demand view

Opec sees enough oil supply, holds demand view

London: Opec held its forecast for world oil demand steady in 2011 and maintained its view that oil supplies are adequate despite the loss of Libyan supplies as its members and rivals pump more crude.

In its monthly report, Opec said it expected world oil demand to grow by 1.4 million barrels per day (bpd) this year, unchanged from last month and in line with a reduced estimate on Tuesday from the US Energy Information Administration.

The Organization of the Petroleum Exporting Countries has stuck to its view this year that supply is sufficient even as prices surged above $120 a barrel. The sharp price drop on 5 and 6 May was no great surprise, it said.

“This was an inevitable adjustment in prices which brought them more in line with short-term market fundamentals," Opec’s report said. “The global supply picture remains healthy."

This is Opec’s last monthly report before it meets to review output policy on 8 June in Vienna.

While Saudi Arabia and some other Opec members have informally raised output this year, the group has kept its official output target unchanged for more than two years.

Opec’s report said its April oil output rose by about 69,000 bpd to 28.99 million bpd as extra supplies from members including Saudi Arabia, Nigeria and Kuwait offset losses from Libya and Angola.

The production figures in Opec’s report are based on secondary sources including consultants and news agencies and are the closest thing Opec provides to an official estimate of its output.