Published January 13, 2015
OPEC would need evidence of a sustained drop in oil inventories before members decide to pump more, the group's secretary general said on Tuesday, rebuffing calls from consumers for higher supply.
The comments from Abdullah al-Badri are the latest sign that the Organization of the Petroleum Exporting Countries will not rush to open the taps. The exporter group next meets to chart policy in September.
"If we are convinced from the figures that we will get from different organizations here and in the States that there is a drawdown in the stocks, then there is a shortage in the market, of course OPEC will react," Badri said at the Reuters Global Energy Summit in London.
"But the trend would have to continue for a reasonable period of time before OPEC will react."
Crude inventories in the United States, the top consumer, fell in the latest week and are unchanged from a year earlier, according to government figures. Gasoline stocks, while rising, are below year-ago levels.
Global oil prices could rally to a record high above $80 a barrel this summer, analysts have forecast, due to tension in the Middle East, an expanding Chinese economy and a reluctant OPEC.
Badri, a former head of Libya's OPEC delegation who took on OPEC's top job in January, said he doubted predictions that Brent crude, now trading around $70, could rise another $10 because supply of crude is enough.
"There is no shortage as far as crude is concerned," he said. "I don't think the price will go to $80. There are no fundamental problems in the market."
While current prices reflect political tension and violence in Africa's top exporter Nigeria, a strain on U.S. oil refineries is the main reason, Badri said.
"There are some other reasons that contributed to this $70 now. The most important factor is refineries in the U.S."
Oil companies have not built new U.S. refineries since the late 1970s, instead increasing capacity at existing plants in a bid to keep up with soaring demand for gasoline and other fuels.
OPEC, source of more than a third of the world's oil, agreed last year to curb output by 1.7 million barrels per day, roughly six percent.
The 12-member group gathers on Sept. 11 to set supply policy and officials have ruled out a need to meet before then.
Oil ministers will discuss setting a production target for Angola, which joined OPEC this year, at the September meeting or at another meeting in March 2008, Badri said.
The International Energy Agency, adviser to 26 industrialised countries, wants OPEC to increase output and so does the U.S. government's forecaster, the Energy Information Administration.
"We see a need for OPEC to produce more crude in the second half of 2007 than they produced in the first half," Guy Caruso, head of the EIA, told the Reuters Energy Summit on Monday.