Opec 'needs to boost output in second half'

Opec 'needs to boost output in second half'
21-07-2007

Opec should increase crude oil production in the second half of the year in a bid to alleviate high prices, the head of the US Energy Information Administration Guy Caruso said.He warned that inaction by the Organisation of Petroleum Exporting Countries could cause global inventories to fall too low. "They wouldn't be dangerously low, but low enough to apply an upward pressure on prices," Caruso said on the sidelines of a meeting of the National Petroleum Council."Based on our demand numbers, which may be slightly higher than Opec's...is that we thought we needed more production in the second half of the year or we were going to have very low inventory," Caruso said. Energy Secretary Samuel Bodman said earlier on the sidelines of the NPC meeting that he was concerned about high oil prices and the possibility that Opec might not increase supply.He said, however, that he was keeping an open mind about how much, if at all, Opec should increase output given that US market tightness had been more about low refining capacity that crude supply. "That may be changing," though, he added.While analysts suspect the group has delivered on about 1 million barrels a day of that cut, the output decrease has helped push oil prices higher at a time when strong demand is already providing support. Benchmark crude futures on the New York Mercantile Exchange ended up Opec this week issued fresh forecasts for oil demand and supply that show the implied daily consumption for its members' oil in the final three months of this year would outstrip their current supply by a hefty 1.15 million barrels.

(Source: Gulf News)