PARIS (Reuters) – OPEC is working hard to bring down oil prices that jumped towards $130 a barrel earlier this year, its secretary general said on Thursday, and is pumping much more than its official target even as exports from cartel-member Iran dwindle.
Oil surged in March to $128 a barrel, the highest since 2008, as increased concern over the loss of Iranian oil due to tighter sanctions combined with supply hitches elsewhere.
Prices have since fallen back and Brent crude was trading just below $118 on Thursday.
“We are not happy with prices at this level because there will be destruction as far as demand is concerned,” OPEC Secretary General Abdullah al-Badri told an energy conference.
“We’re working hard to bring down the price. We’re not comfortable.”
The 12-member Organization of the Petroleum Exporting Countries is pumping 32.3 million barrels per day (bpd), he said, citing figures given to OPEC by the member-countries.
That is 2.3 million bpd more than OPEC’s target of 30 million bpd and higher than a Reuters estimate of OPEC output in April published this week.
Badri again identified $100 as a comfortable price – a level endorsed by top OPEC producer Saudi Arabia in January – and said the price was being driven higher by speculators.
“There has been no shortage of oil in the market. Producers have been able to meet consumer needs,” he said. “We also see this as being the case for the rest of 2012 and the foreseeable future.”
“Today the price continues to be driven by excessive speculation,” Badri said.
NO NEED FOR STOCKS NOW-IEA
The extra OPEC oil is filling gaps caused by an unusually large number of supply outages globally. Supply breaks were running at nearly 1.3 million bpd as of early April.
It has also offset a decline in exports from Iran, which is facing stiffening western sanctions over its disputed nuclear energy program.
Iranian oil exports were running at between 200,000 and 300,000 bpd below last year’s level, Maria van der Hoeven, head of the International Energy Agency, told Thursday’s conference.
Iranian officials have said the country exported an average of 2.2 million bpd last year.
The IEA, adviser to 28 industrialized countries and manager of their emergency oil stockpiles, last year tapped is members’ strategic oil reserves to cover shortages caused by the loss of Libyan exports.
There could be a case for releasing stocks if an unexpected event occurred, as with the civil war in Libya, although there was no reason currently to do so given that the market is well supplied, Van der Hoeven said.
“At this moment, although prices are relatively high, it’s not the case,” she said.
“You can use this instrument only once … so timing and circumstances are very important.”
Badri’s figure of 32.3 million bpd for OPEC production is even higher than a Reuters estimate of 31.75 million bpd for OPEC output in April – the highest since 2008.
OPEC at a meeting in December set the target to produce 30 million bpd, settling an argument which broke out in 2011 after Iran and other members opposed a Saudi-led plan to raise OPEC’s production ceiling.
Output has remained above the target all year as Libyan supply recovered after being virtually shut down during the 2011 uprising against Muammar Gaddafi’s rule.