JAKARTA, 27 October 2004 — Global crude oil overproduction is now running at some 2.1million-2.5 million barrels per day (bpd) meaning there is no supply shortage to worry about, OPEC President Purnomo Yusgiantoro said yesterday.
“The world is already overproducing by 2.1 million to 2.5 million barrels per day, two million barrels per day of which is from OPEC,” said Yusgiantoro, who is also Indonesia’s energy and mineral resource minister. He said that he had already called on members of the Organization of Petroleum Exporting Countries (OPEC) to release all their supply into the market “to give a positive signal to the market that we are not (facing) any shortage.” He said that there was no problem with world crude stocks.
Yusgiantoro said current record prices around $55 reflected a political risk premium of some $10-$15. “That (price) has a political risk premium element of some $10-$15 ... it is a geopolitical matter that is unrelated to the world oil market,” he said, apparently referring to tensions in the Middle East.
Meanwhile, oil prices rose slightly yesterday as markets turned their attention to upcoming estimates of US crude inventories amid worries that heating stocks are low ahead of the northern hemisphere winter, traders said. New York’s main contract, light sweet crude for delivery in December, rose 11 cents to $54.65 a barrel in early trading.
In London the price of Brent North Sea crude oil for delivery in December won 12 cents to $50.90 a barrel in late deals.
The main US oil contract had hit an all-time high of $55.67 a barrel on Monday while Brent reached a record summit of $51.90 before fears of major disruption in Norway began to ease.