Opec said on Thursday that crude oil supply was sufficient for now, though the producer group stands ready to raise supply if needed to meet growing world demand.
The assessment, in the June Monthly Oil Market Report from the Organisation of the Petroleum Exporting Countries, will disappoint consumers who are pressing for higher Opec output to lower prices from $70 a barrel. "The continuation of Opec crude production at current levels should maintain commercial stocks at comfortable levels," the report by economists at Opec's Vienna headquarters said.
"While market fundamentals do not indicate that additional supply is necessary at this time, Opec stands ready to relieve any emerging tightness in the crude oil market." In the report, Opec put 2007 demand for its crude at 30.56 million barrels per day, up from 30.33 million bpd previously expected, partly because of lower-than-expected output from non-member countries.
Still, Opec expects 2007 world oil demand to rise by 1.3 million bpd, or 1.5 percent, unchanged from May's report and a lower projection than other forecasters such as the International Energy Agency.
Oil has risen to above $70 from about $50 in January. Opec says a strain on US oil refineries as well as violence in Africa's top exporter Nigeria have pushed prices up, not a lack of crude. The 12-member group meets next on September 11 to set supply policy and officials have ruled out a need to gather before then.
Oil prices held onto earlier gains after the Opec report was released. Brent crude was up 51 cents at $70.45 at 1250 GMT. Opec, source of more than a third of the world's oil, agreed last year to lower output by 1.7 million bpd and Thursday's report showed members keeping a cap on supply.
The 10 Opec members, all excluding Iraq and Angola, bound by production cut deals pumped 26.395 million bpd in May, down from 26.452 million bpd in April, the report said, citing data from secondary sources. Opec's outlook follows the latest monthly assessment released on Tuesday by the IEA, an adviser to 26 industrialised countries.
The Paris-based IEA lifted its forecast for world demand growth this year to 1.7 million bpd and called on Opec for a fourth month to raise supply. US Energy Secretary Sam Bodman reinforced that message on Wednesday, saying Opec should weigh recent projections for higher crude demand this year and raise output if appropriate. "I would hope (Opec) would take that into account, that there are forecasts for increases in demand, and that they would look at increasing the supply if appropriate," he said.