OPEC eases market saying there is abundant oil supply

OPEC Secretary General Abdullah al-Badri disclosed there is plenty of crude supply, more than enough in fact,  to feed consumption for 2012 and onwards.

He noted that current crude oil prices are influenced by too much speculation, and went on to say that “There has been no shortage of oil in the market. Producers have been able to meet consumer needs. We also see this as being the case for the rest of 2012 and the foreseeable future.”

Experts point to the market’s perception of an oil shortage as the reason behind oil price upswings. In March, prices of crude were a peak not seen since 2008, reaching an oil price per barrel of $128. Nevertheless, prices have recently moved to a lower level of $118 per barrel.

Late last year, OPEC has set projections for oil production at 30 million bpd, following divergent opinion among members. The bone of contention was whether or not an increase in oil supply is really necessary amid the demand situation. Many had opposed the Saudi’s proposal to raise production quotas.

In addition, oil production in Libya has edged slowly towards normalcy, and this has helped oil production reach levels far better than what has been projected.  Libya’s oil industry was greatly impaired by last year’s rebellion against Gaddafi’s regime.

Daily oil supply disruptions in April reached almost 1.3 million barrels. Despite this, however, crude oil prices eased somehow due to excess crude which served as a buffer. Moreover, surplus oil also compensated for curtailed oil imports from Iran, which is currently challenged by U.S. and E.U. sanctions targeting its oil and finance sectors.

In 2011, Iran sold 2.2 million bpd of oil to other countries and according to IEA Head, Maria van der Hoeven, Iran’s exports already fell by up to 0.3 million bpd.

On the other hand, OPEC’s oil production as of April 2012 soared to 31.75 million bpd, the highest level produced since 2008.