Global oil supply and demand balance may ease further on slowing global economy
OPEC said on Tuesday the global oil supply and demand balance could ease further in the second half of the year due in part to a slowing global economy, and top producer Saudi Arabia was already trimming its output.
"Signs appear to be showing that the global economy is slowing further," the Organization of the Petroleum Exporting Countries (OPEC) said in a monthly report. OPEC meets to set policy on Thursday.
"The second half of the year could see a further easing in fundamentals, despite seasonally higher demand."
OPEC cited factors including a slowing world economy, downside risks to demand such as from higher U.S. gasoline prices and supply performing well in non-member countries, supported by growth in the United States.
The report said demand for OPEC oil would average 30.74m bpd in the second half of the year, unchanged from its previous forecast.
OPEC is pumping much more than the demand for its crude and some members including Venezuela are expected to call at Thursday's meeting for the group to lower supplies to prop up prices.
In May, OPEC produced 31.58m bpd according to secondary sources cited by the report, 58,000 bpd less than in April but still 1.58m bpd more than OPEC's supply target of 30m bpd.
"High OPEC crude oil production standing above market requirements provides further confirmation that the market remains amply supplied," OPEC said.
But according to a second set of production figures reported by OPEC and provided by the member-countries, Saudi Arabia has trimmed its production.
Saudi Arabia told OPEC it produced 9.8m bpd in May, down from 10.1 million bpd in April, the report said.
World oil demand would grow by 900,000 bpd in 2012, OPEC said, unchanged from the previous assessment.