BALI, Indonesia (Dow Jones)--Some members of the Organization of Petroleum Exporting Countries are likely to deliver additional crude oil supplies to global markets this month, despite the group's decision last week to maintain its official output targets.
This observation by the head of the International Energy Agency is another factor oil market participants need to take into account as they look at the global oil supply balance, at a time when the northern winter season is biting hard, and may explain why oil prices haven't rallied despite OPEC's decision to maintain output levels.
"We are seeing (output) increases from several countries, including Iraq and Angola," Nobuo Tanaka, IEA's Executive Director, Tuesday told Dow Jones Newswires.
"So, what they have said and what they are delivering is slightly different," he said on the sidelines of the U.N. Climate Change Conference on the Indonesian island of Bali.
OPEC, which pumps nearly 40% of the world's crude, agreed Dec. 5 at a meeting in Abu Dhabi to stand pat on output, resisting calls from consumer nations and the IEA for more supply to rein in oil prices.
Bellwether U.S. light sweet crude futures spiked Nov. 21 to a nominal record high of $99.29 a barrel and, while the market remains at around $88 a barrel Tuesday, the case for another rally may now be weaker.
OPEC's more dovish members, such as Saudi Arabia, are concerned a prolonged period of high prices may hurt demand.
Some are choosing to release additional cargoes to douse speculative sentiment, said Tanaka - a view supported by data over the past week from independent oil-tanker trackers.
Oil prices have climbed as commercial stockpiles held by leading consumer nations such as the U.S. and Japan shrunk in the face of strong demand, touching off concerns about a potential winter supply crunch.
Still, "we have to wait and see" before assessing the impact of OPEC's decision, he said in an interview following a briefing on energy efficiency and technology.
He suggested January as a suitable timeframe to assess the oil market again; OPEC's 13 members will meet again Feb. 1 at their Vienna headquarters.
Meantime, lingering uncertainties over the health of the U.S. economy, in the wake of the subprime housing-related credit market upheavals, remain a key factor impacting on the oil market's outlook, Tanaka added.
His made this comment ahead of a U.S. Federal Reserve meeting later Tuesday, where the central bank is widely expected to reduce its benchmark federal funds interest rates by 25 basis points from 4.5%.
Such a move - which would be a second Fed rate cut in two months - is likely to shore up U.S. economic growth prospects and may pressure the dollar downward.
The greenback's weakness has been supportive for dollar-denominated commodity markets such as oil.
Still, high oil prices, if sustained, may damp global demand growth in the long run.
The IEA has been trimming its forecasts for 2008, although Tanaka won't offer a preview of its next monthly Oil Market Report, scheduled for release Friday.
Tanaka has been stressing the importance of focusing on energy efficiency in order to tackle climate change at the Bali meeting.
"The triple-win potential of energy efficiency - higher economic performance, higher energy security and less climate change - leads to three recommendations: implement, implement, implement, for developed and emerging economies alike," he said in a statement.
Tanaka is also urging governments to step up their support for research into carbon capture and storage - the storage of climate changing carbon dioxide in rock formations like used oil fields.
"The IEA calls on government to step up their support to research in CCS - its development will not happen without it," Tanaka said.
The Paris-based IEA is the energy security watchdog of the Organization for Economic Cooperation and Development, a bloc of industrialized nations.