With crude prices lowest in weeks now, and the OPEC according to some estimates producing at their highest levels in 3-1/2 years, focus in the global crude market seems to be shifting from supply worries to other equally important issues in the overall equation.

According to tanker tracking consultancy Petrologistics, output by OPEC 10 was expected to reach 27.4 million barrels a day in June.

Higher than projected crude prices that have prevailed since late last year have allowed the OPEC the rare chance to turn a blind eye to overproduction. In fact, the organization has been tacitly encouraging its members to produce more. Data made public by other sources also confirms that OPEC members are producing at a considerable higher level than their officially prescribed output quotas.

OPEC-10, bound by output ceiling, already produced an additional 670,000 barrels per day (bpd) of crude in May at an average of 26.36 millions bpd, a Platts survey of OPEC and oil industry officials showed on June 10.

The May average leaves the OPEC-10 pumping more than the two new 25.5 and 26 millions bpd output ceilings, agreed June 3 in the Lebanese capital Beirut, which come into effect July 1 and Aug. 1, respectively. The survey also shows that the OPEC-10 exceeded their current 23.5 millions bpd ceiling by 2.86 millions bpd, or 12.2 percent.

The total OPEC production including Iraq — not bound by any production quota — averaged 28.26 millions bpd of crude in May, up 190,000 bpd from April’s 28.07 million barrels a day or 0.7 percent, the survey confirmed.

Only Venezuela and Indonesia pumped within their current quotas under the previous ceiling of 23.5 millions bpd; the former having lost output capacity as a result of the two-month strike in the winter of 2002/2003 that reduced production to a trickle, and the latter seeing its production capacity decline to the extent that it is now a net importer of crude. Almost all other member countries exceeded not only their current quotas but also the new quotas scheduled to come into effect in July and August.

The survey also confirms the commitment made by Saudi Arabian Oil Minister Ali Al-Naimi. He had confirmed last month that the Kingdom has allocated 9.1 millions bpd in June crude sales both inside and outside the Kingdom. The UAE also has pledged additional barrels - 400,000 bpd - in June.

“The Saudis are well over the monthly average in the Platts survey, and appear to be solidly above nine million bpd now,” said John Kingston, director of oil at Platts. According to another crude market survey carried out by the news agency Reuters, the average production last month of the 10 crude producing states bound by OPEC quotas, was 26.28 million barrels a day, raising production by 530,000 bpd from April.

According to the Reuters survey, the Saudi production in May averaged 8.65 million barrels a day. Some analysts are now predicting that June volumes from OPEC, including Iraq, will exceed 29-mil bpd, in line with the OPEC’s plans to boost output and cool down oil prices.

“Market reports we are getting from Saudi buyers make it clear that the Saudis are putting more oil on the market, and doing it quickly. The key issue from the perspective of consumers now will not be so much on crude, but the focus may shift to heating oil. It’s clear that the market is now worried that with refiners pumping out so much gasoline, stocks of heating oil and other distillates, such as diesel, will not build back to sufficient levels,” Kingston emphasized. Hence as the crude supply situation appear to be easing out; the focus is definitely shifting to other issues.

“The biggest worry is still an attack against Saudi or Iraqi oil infrastructure, but to a certain extent people are becoming a little immune to the news, there’s not a day that goes by without fresh violence in the Middle East,” says David Thurtell, commodities strategist at the Commonwealth Bank of Australia.