TOKYO, (Reuters) - The oil market will have plenty of supply until at least the end of 2011 if OPEC keeps producing at current levels, International Energy Agency Executive Director Nobuo Tanaka said on Monday.
There have been concerns about supply after recent sharp falls in crude and other oil products in floating storage due to robust demand.
“We think if OPEC continues production at the current level, the oil market will be very well supplied towards the end of next year,” Tanaka told Reuters in an interview in Tokyo.
The IEA has revised up its 2010 oil demand growth forecast by 190,000 barrels per day to 2.34 million barrels per day on the back of demand from China as well as the building up of heating oil stocks in Europe ahead of winter. But it said global oil demand will slow in 2011 to 1.19 million bpd.
“There are certain uncertainties about the global economy, so we still maintain the low growth scenario,” Tanaka said.
He added that he thinks that the impact of United States’ latest round of quantitative easing has already been factored into the crude market.
The IEA last week called for eradicating fossil fuel subsidies, which would boost the global economy, environment and energy security.
“There should be a better way for helping poor people rather than undermining the energy markets,” he said.
“We know by phasing out subsidies, yes, it helps reduce demand of the global energy markets by about 5 million barrels per day.”
Fossil fuel subsidies are on course to reach $600 billion by 2015 if no action is taken, he said. The IEA has estimated that such subsidies were $312 billion in 2009.
G20 leaders committed in Pittsburgh in 2009 to phase out, over the medium-term, inefficient fossil fuel subsidies which encourage wasteful consumption.
Oil prices up to $90 won’t hurt global economy
TEHRAN, (Reuters) - Iran’s OPEC governor said oil prices of $70-$90 per barrel would not hurt the global economy and that up to $100 might not create problems, the oil ministry’s official website SHANA reported on Sunday.
“Consumers and producers are unanimous that the oil at $70-$90 prices are suitable prices and will not hurt the global economy,” Mohammad Ali Khatibi told SHANA.
“There are thoughts that increase in the price of oil up to $100 per barrel will not create problems for the market.”
Top oil exporter Saudi Arabia earlier this month shifted upwards the band from a price it has backed for around two years, saying oil at $70-$90 a barrel was comfortable for consumers. Global oil prices are now near $86.
The International Energy Agency (IEA) said on Friday the Organisation of the Petroleum Exporting Countries was raising production fast enough to meet growing demand and reducing compliance to the group’s target for output cuts.
OPEC said in a report this week its 11 members bound by oil production targets -- all except Iraq -- produced 26.89 million barrels per day (bpd) of crude in October.
OPEC said on Thursday demand for its oil will be higher than expected next year as economic growth accelerates with the help of stimulus programmes.
An improving economic outlook for many of the rich developed economies of the Organisation for Economic Co-operation and Development (OECD) was a key factor behind sharp upward revisions to demand forecasts, the producer group said.