Opec president Jose Botelho de Vasconcelos said on Monday it was still too early for the oil exporters' group to make a decision on production changes before its December meeting, as the market remained oversupplied. The Organisation of the Petroleum Exporting Countries will meet in Luanda, Angola, on December 22 to decide on its oil production policy.
"The situation is not (yet) stabilised... I think the market has, at this time, a lot of stocks... and we need to wait until the meeting," he told Reuters. Botelho de Vasconcelos said the market was still "a little bit" oversupplied, putting current global oil inventories now about 62 days of forward cover. "Ideally the forward cover should be around 52 to 53 days," he told reporters later, ahead of a speech on energy security.
The International Energy Agency (IEA) last week said that stocks of oil in OECD countries remained very high at the equivalent of 60 days of forward demand at the end of September, down from 60.9 days at the end of August. [ID:nLCO90947] Compliance in the producer group with its output targets was currently around 65 percent, he said. The IEA, which advises 28 industrialised economies, said last week that compliance among the group's members had slipped.
"I'm happy with compliance, I think our organisation is at 65 percent," Botelho de Vasconcelos said. Opec has kept official output targets unchanged at meetings this year, after it agreed to curb output by 4.2 million barrels per day (bpd) last year. The Opec president said $80 per barrel was a good price for oil. Global oil prices have rebounded nearly 73 percent so far this year, having fallen about 54 percent in 2008.
Botelho de Vasconcelos said Opec should also look carefully at how oil was currently priced and consider the alternatives. "We don't know...it is an issue that we must do some reflection on," he said when asked if Opec was thinking of changing the pricing of oil, currently in dollars, to alternative currencies.