RIYADH (AFP) – OPEC members could increase their production to meet 2011 demand which could rise by two percent, while oil prices are expected to maintain last year’s levels, Saudi’s oil minister said on Monday.
As non-OPEC oil producers are expected to increase their production, OPEC countries too will have the opportunity “to boost their supplies to the global market to meet the rising global demand,” said Petroleum and Mineral Resources Minister Ali al-Naimi
“I expect prices to remain at the same level as last year,” said Naimi, who speculated a “two percent” increase in demand this year.
Speaking at the Annual Global Competitiveness Forum in Riyadh, the oil chief of OPEC’s largest producer said he was “optimistic about the situation of the oil market this year” and expected it to experience “a balance between supply and demand.”
The International Energy Agency (IEA), the energy policy and monitoring arm of the 34-member Organisation for Economic Cooperation and Development, said on January 18 that growth in oil demand in 2010 was at one of the strongest rates in three decades, albeit from a low crisis level.
Oil demand grew by 3.2 percent, an increase of 2.7 million barrels per day (mbd) year-on-year to 87.7 mbd, it said.
In its latest Oil Market Report on Tuesday, the IEA warned that oil prices near $100 a barrel pose a real risk to the world economy.
Oil prices of $100 a barrel represent an “oil burden” of five percent of gross domestic product on the global economy, the IEA calculated, and said such levels in the past “have clearly been associated with economic problems.”