At the conclusion of the 161st meeting of the Conference of the Organization of Petroleum Exporting Countries held June 14 in Vienna, the producer group decided to leave its official production ceiling at 30 million b/d.
The latest output estimates from the International Energy Agency, however, indicate that OPEC crude oil production in May averaged 31.87 million b/d, down 200,000 b/d from the group’s April output.
OPEC reviewed recent oil market developments, supply and demand projections, and the outlook for this year’s second half and noted that the heightened price volatility witnessed during the early part the year was a reflection of geopolitical tensions and increased levels of speculation in the commodities markets rather than solely a consequence of supply and demand fundamentals, the group said in a press release.
Also noted were downside risks facing the global economy and weaknesses that have led to the fall in oil prices over the past 2 months.
Although global oil demand is projected to increase slightly during the year, this rise is expected to be mostly offset by the projected increase in non-OPEC supply. In addition, comfortable oil stock levels in the Organization for Economic Cooperation and Development, which presently are below the historical average in terms of absolute volumes but well above the historical norm in terms of days of forward cover, indicate that there has been a contraseasonal stockbuild in the first quarter of 2012, and this overhang is predicted to continue throughout 2012, OPEC said.
Stocks outside the OECD have also increased. Taking these developments into account, the second half of the year could see a further easing in fundamentals, despite higher demand, the group said.
The next OPEC ordinary meeting is set for Dec. 12.