Opec signals need for bigger oil output

The Organisation of the Petroleum Exporting Countries (Opec) said Friday there would be a growing gap between its production and demand in the coming months, signalling a need to produce more oil. Opec's secretariat issued the analysis in its monthly market report, just two days after the group's oil ministers ended a meeting in Vienna without being able to agree to lift their output limit.
The deferral of the decision amid the current high price level has further pushed up the cost of oil. The European benchmark brand Brent rose 2.72 dollars Wednesday and Thursday, but fell slightly to 119.15 dollars on Friday, shortly before the Opec report was issued.
Global consumption would increase at a higher rate than supply from non-Opec countries, and global stocks would go down in the summer driving season, the report said.
"This would result in much higher demand for Opec crude, reaching a level higher than current Opec production and implying a draw in inventories," Opec's analysts said. They added that "this would leave a sizeable gap between current production and the demand for Opec crude." The cartel increased its global demand forecast by 60,000 bpd to 88.14 million bpd.
In May, Opec members already produced 1.47 million barrels per day (bpd) above their target of 24.85 million bpd (one barrel equals 159 litres). This figure excludes Iraq, which is not bound by a quota. Analysts think that Saudia Arabia and other countries with spare production capacity will step in to meet growing demand, even if Opec cannot agree to raise its output quotas. Opec's 12 members raised their actual output by 171,000 barrels per day in May, with the biggest increases coming from Saudi Arabia, Nigeria and Angola.