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OPEC sees balanced oil market for rest of year

PARIS: Global supply and demand for crude oil should continue to be fairly balanced this year, the secretary general of OPEC said, signaling the group is likely to leave its existing output ceiling in place at its June meeting.
“Looking at the current situation, we see the market as relatively balanced, and we expect this to be the case for the rest of 2014,” Abdullah Al-Badri, of the Organization of the Petroleum Exporting Countries, said on Friday.
In a speech to the Petrostrategies’ International Oil Summit in Paris, he said OPEC’s crude output was currently close to 30 million barrels a day, its official production target.
“This is what is required by the market,” he said.
OPEC expects its output to remain steady in the medium term at 29 million to 30 million barrels a day, he said, adding that this would mean a rise in spare capacity towards what he described as “comfortable levels”.
OPEC this week lowered its oil demand outlook for 2014 and ended a run of upward revisions to global consumption growth, highlighting concerns over the economy and pressure on its market share from rival producers.
In a separate report on Friday, the International Energy Agency also forecast that world oil demand would rise less than previously thought this year due to a lower outlook for Russia’s economic growth following its annexation of Crimea.
The IEA also reduced its expectations for the supply increase from non-OPEC countries this year, however, saying that OPEC would have to raise its production from March levels, which it estimated at 29.62 million bpd.
Prices for benchmark Brent oil futures have traded so far this year in a relatively narrow range of about $104 to $112 per barrel.
“Prices have held fairly steady for the past 18 months or so. It is a level that has been acceptable to both producers and consumers,” Al-Badri said.
“In recent months, there has also been talk of falling prices. This is obviously difficult to assess.”