By Anees Al Qudaihi
The Organization of Petroleum Exporting Countries may need to cut production again by the second quarter of next year when the global oil market could be oversupplied by 2.5 million barrels a day, OPEC's director of research said Wednesday.
"Our forecasts show that non-OPEC supply will rebound next year, demand will be moderate and fundamentals show there's a surplus now in global oil inventories," Hassan Qabazard told Dow Jones Newswires in an interview.
According to forecasts in OPEC's monthly oil market report, released Monday, crude oil supplies from producers outside the group are expected to grow 1.8 million b/d next year - the highest rate in over 20 years - from 1.1 million b/d this year.
Meanwhile, OPEC kept its forecast for 2007 global oil demand growth unchanged at 1.3 million b/d.
However, Qabazard didn't say how much oil would need to come out of the market in the second quarter of next year. He added the market was currently oversupplied by 1.5 million b/d.
Qabazard's comments come ahead of OPEC's emergency meeting in Doha Thursday where they will discuss a supply cut of 1 million b/d. Ministers have been alarmed by the speed of the decline in U.S. oil prices, which have fallen around 25% from record highs in mid-July.
OPEC ministers have been divided over whether to cut from the group's production ceiling of 28 million b/d or from actual production for the 10 members subject to a quota.
However, Qabazard said OPEC ministers were in agreement the cut should come from actual production, which he said averaged 27.6 million b/d in the past year.
"After the cut we'll be producing 26.6 million b/d," he said adding that the cut would be implemented from December,
OPEC is next scheduled to meet December 14 in Nigeria.
(Dow Jones Newswires, 18/10/06)