LONDON: OPEC’s secretary-general said he was not worried about the oil market outlook for 2013, as the exporter group pumps a million barrels per day more than its official output target without weakening prices.
“I am not really worried. I’m looking forward to 2013. It will be, I hope, a comfortable year for OPEC and for the oil price,” Abdullah al-Badri said in an interview Tuesday.
The comments indicate the Organization of the Petroleum Exporting Countries, which meets in Vienna next month, is unlikely to make big changes to its output policy. Badri himself would not be drawn on what the 12-member group would decide.
OPEC is pumping 1 million bpd more than its output ceiling of 30 million bpd, he said, and according to OPEC forecasts, demand for the group’s oil will decline in 2013 to an average of 29.72 million bpd as nonmember countries expand supply.
Output has climbed this year as an expansion in Iraq’s export capacity and high production from top exporter Saudi Arabia offset reduced supply from Iran, whose output has fallen sharply this year due to Western sanctions.
Badri said there was a surplus in the market, but he was not concerned by it.
“There is some oversupply, maybe 500,000 to 600,000 [barrels per day], but I don’t think it will be a problem. If you look at the market situation, we are producing 31 million barrels per day, 1 million above our agreed level, but the market is still $110 a barrel. So let us wait and see.”
Iraq increased production by about 500,000 bpd this year and the market has absorbed the extra crude, Badri said, adding Iraq could add the same amount of oil in 2013.
Current prices pose no downside risk for world growth, he said on the sidelines of the Oil & Money conference in London, an annual gathering of top industry executives.
“This price has been with us now for almost a year. I don’t think it poses, at this time, any economic problems.”
Consumers have been concerned about the rising price of oil this year, which hit a 2012 high of $128 in March, supported by concern about supply disruption from Iran as well as actual outages in South Sudan, Yemen, Syrian and the North Sea.
The International Energy Agency, an adviser to 28 industrialized countries, said in May that oil prices, then around $112 for Brent, were a threat to economic recovery.
OPEC produces more than a third of the world’s oil and has pumped more than its 30 million bpd output target all year. The organization meets on Dec. 12 to set output policy.