OPEC Pumps Up Production To Highest Level Since 2008

OPEC Pumps Up Production To Highest Level Since 2008
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Πεμ, 10 Μαΐου 2012 - 18:36
OPEC Thursday said its members are pumping at levels not seen since the 2008 recession and said it was becoming more optimistic on oil-demand growth prospects.
OPEC Thursday said its members are pumping at levels not seen since the 2008 recession and said it was becoming more optimistic on oil-demand growth prospects.

In its latest monthly market report, the Organization of Petroleum Exporting Countries said its crude production was 32.42 million barrels a day in March, up 317,000 barrels a day from the previous month.

The number, based on disclosures by OPEC members, is the highest since summer 2008, after which time the producer group embarked to a string of output cuts as it sought to revive flagging prices amid a global recession. But the group has now reversed its production trend as it seeks to dampen prices that are now well above its ideal level of $100 a barrel.

After downgrading oil consumption forecasts in recent months, the group appear to be also more optimistic on the health of crude demand. It slightly upgraded its global oil demand growth figure for 2012, by 40,000 barrels a day to around 900,000 barrels a day. Global oil demand is now estimated at 88.67 million barrels a day this year.

"Given the stabilization of the
U.S. economy and the shutdown of Japanese nuclear power plants, world oil demand growth has--at least for the short-term--stopped its declining trend," OPEC said.

However the group, whose members produce one in three barrels consumed worldwide, warned against any complacency over the strength of the recovery.

"Overall, the global economic outlook remains fragile, with heightened uncertainties in the euro zone and potential spill-over effects in the emerging markets," it said.

Yet OPEC could now say it has played its part in helping stabilize oil markets jittered by fears of disruption to Iranian supply.

Earlier this year, prices rocketed to $128 a barrel after sanctions started denting oil exports from Iran, and the Islamic Republic threatened to block the Strait of Hormuz, a key oil shipping route. But other OPEC members, notably
Saudi Arabia , have boosted production to anticipate any disruption, contributing to a build-up of U.S. oil inventories to levels not seen in 21 years and to a sharp drop in oil prices.

Yet, the group may face heated internal debates if it keeps pumping at current levels.

In its report, OPEC said demand for its crude stands at same level as its agreed ceiling of 30 million barrels a day, some two million barrels less than current production.
Iran last month accused the Saudis--the group's largest producer by far--of breaching its OPEC commitments.

Disclosures by the group's members also point to sharp discrepancies on production estimates, pegging March output at 1.1 million barrels a day higher than figures from independent oil consultancies.

Much of the difference stems from numbers supplied by
Venezuela and Iran --two members who have long disputed third-party estimates of their production. For instance, secondary sources peg Iran's April production at its lowest level in 20 years, at 3.2 million barrels a day, over half a million barrels a day lower than Iran's official number.

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