There is no cause for concern that there will be another price surge on oil markets this year on the scale of the $147-a-barrel spike seen in 2008, the Organization of Petroleum Exporting Countries said Wednesday.
There is no cause for concern that there will be another price surge on oil markets this year on the scale of the $147-a-barrel spike seen in 2008, the Organization of Petroleum Exporting Countries said Wednesday.

"The market is in much better shape than it was in the first half of 2008," said OPEC in a commentary included in its March-April bulletin. There is, "a bigger gap between supply and demand, greater spare capacity, higher inventories and, looking further into the future, a better facility to bring on-stream new capacity in the medium term," it said.

Pressure on prices from demand is also weakening, due to the economic problems in Europe , it said.

There is a danger that if current geopolitical concerns about oil supply ease, then the oil market could over compensate and send prices down to a level where they harm the interests of producers, OPEC said. Analysts say the prime geopolitical concern on oil markets today is the standoff between Iran and the West over the country's nuclear program.

OPEC's crude-oil output rose again in April to 31.820 million barrels a day, according to a Dow Jones Newswires survey of industry sources and analysts. This is 1.82 million barrels a day above the group's current production ceiling and well above where most industry analysts see the demand for the group's crude this year.

Iran , which faces tightening sanctions on its oil exports, saw its production fall to a 20-year low of 3.2 million barrels a day. But other OPEC members were able to offset the Iranian decline. Iraq has reached its highest production in 20 years, at 3.06 million barrels a day, after opening a second offshore export terminal.

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