LONDON: Opec sees the oil market as well supplied and is wary of creating a glut next year, the group's secretary-general said on Thursday, suggesting producers are in no rush to expand a June agreement that raises output.
Oil prices have rallied this year on expectations that US sanctions on Iran will strain supplies by lowering shipments from Opec's third-largest oil producer. Brent crude last week reached US$86.74, the highest since 2014, report agencies.Opec Secretary-General Mohammad Barkindo, speaking at the Oil & Money conference in London, said there were many non-fundamental factors influencing the oil market that were beyond oil producers' control.
"The market has been reacting to perceptions of a possible supply shortage. The market remains well supplied," he told a briefing.
"The projections for 2019 clearly show a possible rebuild of stocks," he said of the supply and demand balance for next year.
Opec separately updated its oil supply and demand forecasts on Thursday, cutting demand estimates for next year due to ecomomic challenges such as trade disputes and volatile emerging markets, and pointing to excess supply.
One of the factors boosting prices, according to analysts and some members of the Organization of the Petroleum Exporting Countries, has been the decision by US President Donald Trump to reimpose sanctions on Iran.