Statement by HE Abdalla Salem El-Badri, Secretary General of OPEC, on Oil Market Fundamentals

No 5/2007
Vienna, Austria
14 Jun 2007

OPEC continues to monitor global oil markets closely. We have remained vigilant and we will continue to do so by closely observing market developments.

Global oil inventories are healthy. The most recent preliminary data for May indicates that total OECD commercial oil stocks are around 34 million barrels higher than the five-year average. Within Europe, total oil inventories have reached an historic high and now stand at 66 million barrels above the five-year average. In the US, crude stocks show an excess of 24 million barrels over the five-year average. While US gasoline stocks are still below the five-year average, they have generally shown an increasing trend in recent weeks. In May, gasoline stocks rose 4.9 million barrels.

With OPEC maintaining production at its current level of 30 million barrels a day, this would ensure that commercial oil stocks remain at comfortable levels for the time being, if there is no significant change in market conditions.

On the supply side there is an expectation of increased oil output from non-OPEC in the second half of 2007, as some production returns and delayed projects come on stream.

However, considerable uncertainties continue to surround world oil demand and demand for OPEC oil. But a combination of current high inventory levels and increasing OPEC spare capacity, which is expected to reach around 15% in the second half of this year, means there are adequate supplies available to cope with any upward revisions to oil demand forecasts.

OPEC notes oil markets remain well supplied and market fundamentals do not require any additional supply from the Organization at this time.

OPEC will continue to monitor developments and is prepared to help mitigate any tightness which may emerge at any future stage.