LONDON (Reuters) - Oil markets should be balanced during the second half of this year with extra production sufficient to meet growing demand, OPEC said on Thursday, suggesting oil prices may be fairly stable despite worries over lost supply.
Oil prices rose sharply on Thursday with Brent crude climbing above $112 for the first time since March on worries that violence in Iraq could disrupt supplies.
But the Organization of the Petroleum Exporting Countries, which supplies a third of the world’s oil, said rising oil production should be more than sufficient to meet demand.
The cartel of 12 exporters said global oil inventories were comfortable. U.S. stockpiles were high and commercial stocks in the large developed economies were sufficient at the end of April to meet almost two months of consumption.
“Overall, the ongoing rise in supply would be adequate to satisfy the growth in oil demand in H2 2014, resulting in a well-balanced market,” OPEC said in its monthly market report.
OPEC agreed on Wednesday to keep its oil production target at 30 million barrels per day (bpd) for the second half of this year. The grouping is happy with oil prices above $100 a barrel and its members are pumping enough oil to cover their spending needs.
The OPEC report said output from the United States and Canada and other non-OPEC countries would add 1.44 million bpd of extra oil to world markets this year, 60,000 bpd more than OPEC’s previous forecast.
This would outstrip its projection of a rise of 1.14 million bpd in global oil demand and mean less demand overall this year for oil from OPEC.
OPEC cut its forecast of demand for its own crude in 2014 to 29.69 million bpd, down 70,000 bpd from its previous estimate.
The report, citing secondary sources, said total OPEC oil production rose 142,000 bpd to 29.76 million bpd in May, led by increased production in Angola, Iraq and Saudi Arabia.
Reporting by Christopher Johnson; editing by Jason Neely