The Organization of the Petroleum Exporting Countries in a recent report said that its oil consumption is 8.3% more than needed.
OPEC released data earlier this week to show that it was producing more oil than was needed and is the reason a good number of countries had reached levels deemed comfortable in oil consumption, which is put at having enough oil to last for 59 days.
Production for OPEC, which has a planed meeting for next month, has increased to 31.62 million barrels per day due to the stabilization and recovery of the Libyan oil industry as well as increased production from Iraq. Furthermore, Saudi Arabia was able to increase its supply to the world market by more than 56,500 barrels a day, to reach 9.9 million. In fact, it is this development that led to the reduction of oil price per barrel from the high of $128 it witnessed in March, by around $15.
This year, it is estimated that the world will consume more than 88.7 million barrels of oil, an increase of 1% more than 2011. This according to OPEC’s estimates for the last month is more than 40,000 barrels a day. Therefore, the group predicts that it will need to supply more than 30.9 million barrels a day in order to meet demand.
The increased production that led to an over supply of crude oil in the world market has also been boosted by increased production from non-OPEC members. There was an increase of more than 50,000 barrels a day from countries such as Canada and Russia, and the US too is predicted to have increased production. So, the increase in production from these countries is put at 600,000 barrels a day, so that the total from these members reached 53 million barrels a day.
Therefore, in the first quarter, OPEC reports that supply exceeded demand due to the increased production from both OPEC and non OPEC members. In fact, the over supply according to various sources is put at 1.62 million above the targeted demand.
The report from OPEC also showed that that the decline in world growth in the oil industry had stopped due to the stabilization of the US economy as well as growth for non-OPEC oil.
Therefore, OPEC, which basically meets a third of all world oil demands, is pleased with its performance and is the reason the general secretary of the organization, Abdalla el-Badri, has said that the organization would be looking to bring down the price of the commodity since the prices are too high.
Nonetheless, the US energy info administration also increased its forecast for oil demand in the world. The agency predicted that demand would increase by up to 960,000 barrels a day, an increase of more than 70,000 barrels a day based on its previous estimates.