May 11, 2011 / 10:42 AM / 6 years ago

OPEC sees enough oil supply, holds demand view

LONDON (Reuters) - OPEC held its forecast for world oil demand steady in 2011 on Wednesday and maintained its view that oil supplies are adequate despite the loss of Libyan barrels 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 U.S. Energy Information Administration.

The Organization of the Petroleum Exporting Countries has stuck to its view this year that supply is ample even as prices surged above $120 a barrel. Wednesday’s report said the price plunge last week to as low as $105 was no great surprise.

“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 on June 8 in Vienna. With a month to go, no consensus has emerged yet on whether OPEC will raise its output target or keep it the same, as it has done for more than two years.

The world’s three most closely watched oil forecasters -- OPEC, the U.S. government’s EIA and the Paris-based International Energy Agency -- all now expect world oil demand to rise by about 1.4 million bpd in 2011.

That may change on Thursday when the IEA, which advises 28 industrialized countries, issues its latest oil market report.

Brent crude was trading at around $117 on Wednesday, having dropped to as low as $105.15 on Friday as part of a cross-commodities sell-off.


The report added to evidence that, despite no official OPEC policy change, Saudi Arabia and some other members have raised output this year to make up for Libyan outages.

OPEC 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.

Extra oil is also coming from producers outside the 12-member OPEC. The report said non-OPEC output -- about three in every five barrels -- would expand by 650,000 bpd this year, 70,000 bpd more than previously thought.

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

Many OPEC countries do not disclose their production on a timely basis.

Supply by the 11 OPEC members subject to output limits, all except Iraq, is running at 26.33 million bpd, OPEC said, or 1.5 million bpd more than their notional target of 24.84 million bpd in place since the start of 2009.

Some OPEC members including Ecuador and Venezuela have said they see no need to adjust the target at the June meeting, but one OPEC delegate has raised the possibility of increasing it to bring the quota into line with actual supply.

“There’s nothing really surprising in the report,” said Christophe Barret, an analyst at Credit Agricole. “It is possible OPEC may change the quota to introduce more credibility.” (Editing by James Jukwey)

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