Oil market is well supplied - OPEC

Producers from the Organisation of Petroleum and Exporting Countries are unlikely to increase output in the short-term, after the cartel’s secretary-general said the market was already well supplied.

Speaking at the Oil & Money conference in London, Mohammad Barkindo acknowledged that the market had been “reacting to perceptions of a possible supply shortage”.

Oil prices have rallied through 2018, with Brent crude reaching highs of around $86 this month, on fears that US sanctions on Iran will affect supply. Iran is OPEC’s third-largest oil producer and while other nations are looking to start trading with the country again, the US has enforced fresh barriers.

But Barkindo said: “The market remains well supplied. The projections for 2019 clearly show a possible rebuild of stocks.”

OPEC also updated its supply and demand forecasts for next year, reducing demand for 2019 to 31.8m barrels per day because of economic challenges such as trade disputes and volatile emerging markets.

It also pointed to an excess of supply, as non-OPEC countries increase output.

According to the cartel, production rose by 132,000 barrels per day in September to 32.76m, the highest this year.

OPEC will next meet in December to set 2019 targets.