VIENNA, 2 February 2006 — OPEC hopes to increase its spare production capacity by 0.5 million barrels of crude per day by June, OPEC President Edmund Daukoru said here yesterday, referring to a key factor on oil markets.
After meeting an Austrian delegation representing the presidency of the European Union, Daukoru said: “We hope to have half a million bpd more spare capacity ... by June if not even more”.
Daukoru, who is Nigeria’s presidential adviser for oil and the current president of OPEC, had said on Tuesday that OPEC members currently had more surplus production capacity than was commonly believed. He said the 11 OPEC members had about 2.0 million barrels a day of oil in reserve in addition to current output which he estimated at 30 million bpd. OPEC could produce an extra 2.0 million barrels per day if necessary, he explained. However, analysts have estimated OPEC’s spare capacity is 1.5 million barrels per day at most, and that most of this is heavy crude in the hands of Saudi Arabia.
Oil prices rose sharply throughout 2005 and remain at near record levels in 2006, partly as a result of concern that OPEC producers would be unable to increase the amount of oil they produce in the event of disruption to supplies from a major exporter.
Members of the Organization of the Petroleum Exporting Countries, which provide about 40.0 percent of world crude oil supplies, are currently pumping a record 28.0 million bpd, according to their official production ceiling.
Daukoru, who had just met Austrian Economy Minister Martin Bartenstein, underscored dialogue between OPEC and the European Union on energy issues. “We emphasized once again the importance of maintaining the dialogue (between OPEC and the EU) when prices are low as well as high.”
Bartenstein said: “While expressing concern about continued oil market volatility, we reiterated the importance of market stability and reasonable prices both for producers and consumers for the world economy at large and especially the economies of the developing countries.”
The Austrian minister has called an extraordinary meeting of the EU Council of Ministers on energy to deal with high prices and increasing dependence on imports.
World oil prices rose yesterday after the United States published mixed data concerning its stockpiles of crude. New York’s main contract, light sweet crude for delivery in March, gained 68 cents to $68.60 per barrel in pit trading.
In London, the price of Brent North Sea crude for March delivery jumped 79 cents to $66.78 per barrel in electronic deals.
The US Department of Energy said stockpiles of crude oil and gasoline increased over the past week, but distillate inventories declined.
In a weekly inventories report, the DoE said crude stocks rose 1.9 million barrels in the week ended Jan. 27 to total 321 million barrels, sharply outstripping US analysts’ expectations. Oil traders had expected oil stocks to rise by only 383,000 barrels.
The latest figures show that US oil stocks are 11.4 percent above the level recorded a year ago. Stocks of motor gasoline (petrol) were up 4.2 million barrels over the week at 219 million, the government department added. The rise in gasoline stocks was also larger than expected.