Hiking oil supplies to the international market ruled out — leading expert

By Abdelwaheb Al-Gueyed, KUNA

Vienna : Member states of the Organization of Petroleum Exporting Countries (OPEC) will unlikely alter the ceiling of the crude output during their scheduled meeting here on Friday, according to a ranking expert.

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The OPEC producers will most likely refrain from taking a decision to hike the production of oil for the regular reports and data of the cartel show that the supplies cover the market needs in a very balanced manner, thus there is no urgent need to pump extra crude into the market, said Director of OPEC’s Research Division Dr. Hassan Mohammad Qabazard, in an exclusive interview with Kuwait News Agency (KUNA).

Qabazard told the Kuwaiti national news agency that the organization would certainly monitor the market conditions and levels of prices, in the second quarter of the current year, to examine possibility and feasibility of increasing supplies. He also forecast a drop in the demand during this period of the year.

Qabazard cited some figures that showed that the output would exceed the demand by 1.4 million barrels per day, thus leading to projected growth of the reservers of crude in the major industrial states.

Hiking the supplies is also ruled out in shadow of the current global economic recession, particularly in the United States, Qabazard noted.

Elaborating further, the ranking expert said, on the basis of statistics and calculations of the organization, the demand for oil was projected to hike by 1.3 million bpd, but non-OPEC producers would also hike their output by 1.

100 million bpd, in addition to the projections that supplies of the non-oil energy materials, namely gas, would increase during the year.

In case the rececession proceeded in a limited manner, the global demand for the crude would certainly drop on an identical scale, but if it proved to be on a wide-scale, the demand would certainly drop drastically, Qabazard elaborated.

Touching on the current high prices of oil, the director of the OPEC research department said the prices have risen due to bids by speculators to capitalize on Middle eastern tension and instability in some major producing states, such as Nigeria, to make as high as possible of earnings.

These speculators in the world oil sector got involved in robust speculations amounting to USD 150 billion, seeking to cover up for losses they had incurred as a result of the US real estate sub-prime crisis and the record fall of indices of the global financial markets.