Global oil markets are in balance and receiving ample crude, the energy minister of the United Arab Emirates said, while some industry officials including Total SA’s trading head said supply may be outpacing demand.
The Organization of Petroleum Exporting Countries, which plans to meet on May 31 to review its production target, is ensuring that supplies are sufficient, Suhail Mohammed Al Mazrouei, the U.A.E. minister, told reporters today in Abu Dhabi, the country’s largest sheikhdom. The U.A.E’s governor to OPEC, Ali Al Yabhouni, said the group’s limit of 30 million barrels a day is adequate for 2013. Both officials spoke at the Middle East Petroleum and Gas Conference.
The U.A.E. was the sixth-largest producer in OPEC last month, pumping 2.67 million barrels a day, according to data compiled by Bloomberg. OPEC supplies about 40 percent of the world’s oil. The price of OPEC’s basket of twelve crudes was $97.40 dollars a barrel on April 19, according to the group’s secretariat. European benchmark Brent crude futures have slid 9 percent this year and traded today in London at close to $100.
“The market is well-balanced, and there is no oversupply,” Al Mazrouei said. World demand may increase by 1 million barrels a day and reach 105 million in 2030, buoyed by economic expansion in Asia and South America, he said.
Al Yabhouni, the OPEC governor, said the world’s stockpiles of crude are at 5 percent to 6 percent above average and forecasts a correction in oil prices in the second quarter of the year. Saad Abdulla Al-Kuwari, chief executive officer of Tasweeq, Qatar’s oil product marketing company, shared this outlook.
“The crude price is driven by oversupply in oil markets and the fall in equities,” Al-Kuwari said, He predicted at the conference that oil would trade at about $100 in the third quarter.
Total also sees a “little bit of surplus” in oil markets, Pierre Barbe, the company’s head of trading and shipping, said at the same conference, without estimating the excess. Still, the Paris-based company thinks $100 a barrel is a plausible price floor for crude for the next 10 years, he said.
Global demand for OPEC crude will fall in 2015 and 2016, and the group’s output will decline in the next five years, David Dalton, BP Plc’s regional president for the Middle East, said at the conference.
Al-Mazrouei, the U.A.E. energy minister, managed production for five operating companies at state-run Abu Dhabi National Oil Co. before assuming responsibility for the ministry on March 12. His predecessor, Mohamed Bin Dhaen Al-Hamli, had held the position since 2004.
OPEC’s 12 members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.