KUWAIT – OPEC (search) may boost oil supplies by a further 500,000 barrels per day (bpd) next month to help meet an anticipated demand surge in the second half of the year, the cartel's president said this weekend.
A five-day price slide has cooled oil from record highs and removed the need for OPEC to hike output immediately. Swelling U.S. crude stockpiles sparked the sell-off, but some in OPEC, especially Gulf members, want global inventories to build more.
"Kuwait (search) believes that the increase in production is still possible and may come in May due to the expected rise in demand by about 1 million barrels per day in the third quarter," Sheikh Ahmad al-Fahd al-Sabah (search), also Kuwaiti oil minister, said in remarks published on Sunday.
The Organization of the Petroleum Exporting Countries raised output limits by 500,000 bpd last month to 27.5 million bpd in a bid to cool prices.
It left room for a second 500,000 bpd increase before a June meeting if prices failed to drop below $55. The group began talks on the second rise last weekend and said then it could decide within two weeks.
But oil has retreated 9 percent since last week, with U.S. crude closing at $53.32 on Friday — down from highs above $58.
"The oil prices have fallen now ... so there's no need to continue consultations on an output hike but the consultations continue for discussing the situation in general," said Sheikh Ahmad.
Qatari Oil Minister Abdullah al-Attiyah also said at the weekend that a second production hike ahead of the cartel's June 15 meeting was still possible.
Their remarks contrast with Algerian oil Minister Chakib Khelil who said on Saturday he saw no need for a further rise in output as the market was well supplied.
"Why should we increase production? Stocks are good and the market is well supplied. I do not see why we should increase production if our refining capacities are limited," said Khelil.