DUBAI (Reuters)- OPEC sees no reason to change crude output as the nine-month high in oil prices last week was due to U.S. gasoline supply concerns and international political tension, a senior OPEC delegate said on Monday.
“Production from OPEC will stay stable,” the delegate told Reuters. “There is no reason for now to change. On the crude side, the market is well balanced.”
London Brent crude hit a nine-month high of $71.80 a barrel last week. On Monday, it traded at $70.25.
Fear of a gasoline supply shortage in the world’s number one consumer the United States and tension between the West and Iran were factors behind the price rise, the delegate said.
The peak demand summer driving season started on Monday, as U.S. motorists began taking to the road for vacation. But a string of plant outages have prevented refiners from building stocks before the summer and cut U.S. gasoline supplies by 15 percent since winter.
While gasoline stocks were low, U.S. crude inventories were normal for the time of year if compared to the last five years, the OPEC delegate said.
“No oil companies are saying anything about a lack of crude oil supply in the market,” he said. “Companies are satisfied with the supply of crude oil. Other bottlenecks are the problem.”
The Organization of the Petroleum Exporting Countries, source of more than a third of the world’s oil, agreed last year to curb output by 1.7 million bpd, roughly six percent.
The International Energy Agency (IEA) has called for three consecutive months for OPEC to reverse some of those cuts to refill stocks and lower prices.
Inventories in industrialized nations were falling at an unusually fast rate for the time of year, the adviser to 26 industrialized nations said in its May Oil Market Report.
“The IEA instead of focusing on what oil producers should do, should also focus on what consumers should do and on refining capacity,” said the OPEC delegate.
Refinery capacity constraints due to changing fuel specifications were limiting oil product supplies in consumer countries and would continue to affect the market for some time, he said.
“This is a major global issue,” he said. “The flow of gasoline to the United States is not as easy as it used to be due to specifications and the same is true in other countries.”
Tension between Iran and the West over Tehran’s disputed nuclear program also contributed to price volatility, he said.
“Tension in the Arab Gulf is another issue,” he said. “These things have the market worried.”