OPEC produces at capacity

The president of OPEC said on Monday that all members of his organization are currently producing oil near capacity.

This was a clarification of a statement he made on Sunday that OPEC will not raise production when its member nations meet in June in Vienna.

He also said that Saudi Arabia is now pumping 10 million barrels of crude oil per day. Other OPEC officials said that they could not confirm this figure, but that the 10 member nations bound by quotas are pumping approximately 28.2 million barrels of crude oil per day.

When Iraq’s production is taken into consideration, this number rises to 30.2 million barrels per day, well above OPEC’s official quota of 27.5 million barrels per day.

This level of production, the OPEC president said, would ensure adequate oil supplies.

On this news, the price for June deliveries of West Texas Intermediate rose 9 cents to $51.05 per barrel in midday trading in New York, and Brent June deliveries were down 5 cents to $50.72 per barrel in late afternoon London trading.

Over the weekend, Algeria’s energy minister had less optimistic news, saying that OPEC might not be able to meet demand for oil in the fourth quarter unless adequate inventories were built up.

Still, with current US crude oil reserves at 327 million barrels, most analysts believe that as long as OPEC keeps up adequate production, prices should fall at least in the
short term.