OPEC, which pumps about 40 percent of the world's oil, and other producers will struggle to add new production capacity because of a shortage of rigs and the required skilled labor, the executive director of the International Energy Agency (IEA) said.
"I am afraid that in the next two or three years capacity will only increase at the same pace as demand, with no increase in spare capacity," Claude Mandil said yesterday at the Organization of APEC energy conference in the Jordanian capital of Amman.
Mandil said new capacity "will not come very quickly because there are a lot of bottlenecks."
Qatar's oil minister said OPEC is unlikely to change output quotas when the group meets in Caracas in two weeks time as global markets are well supplied.
"If the price will continue as it is, I think our decision will be a roll over," Abdullah bin Hamad al-Attiyah said in an interview in Amman.
The group's next policy-setting meeting is on June 1 in Caracas.
Crude oil in New York closed at a record US$75.17 a barrel on April 21, amid concern supplies out of Iran may be disrupted over its nuclear program standoff with the US. The price closed at US$72.04 a barrel on Friday.
OPEC has kept its official quotas unchanged at 28 million barrels a day for 10 months as some members including Saudi Arabia pump more than their allotment to make up for members such as Venezuela and Nigeria, which aren't meeting their share.
Saudi Arabia's Oil Minister Ali al-Naimi said OPEC is doing enough to add new oil capacity to meet future demand growth, though he warned fellow producers against going to far due to the unpredictable nature of economic growth.
The kingdom, which plans to raise its output capacity by 1.2 million barrels a day to 12.5 million barrels a day by 2009, is ahead of schedule and under budget with its expansion program, the Saudi oil minister told reporters at the oil conference in Amman.
"Global economic growth may not continue at this high level for many years," al-Naimi said in a speech.
"We must be cautious and not take forecasts and expectations as solid cases, such as the continuation of strong oil demand growth, and the continuation of today's prices or their increase," he said.
The IEA lowered its estimate for crude demand by 200,000 barrels a day to 84.83 million barrels a day, reducing this year's growth to 1.5 percent.
In the US, while the economy grew at its fastest pace in two-and-a-half years during the first quarter, "this was not reflected in oil product demand growth," which fell 1.4 percent versus the year-earlier quarter in the US, the report said.
OPEC's crude production rose by 170,000 barrels a day last month to 30.04 million barrels a day, according to IEA estimates. Oil flows rose in Iraq, Nigeria, Venezuela and Libya.
Saudi's al-Naimi said world oil demand is growing by "about 4 percent a year," and added, that it may reach "100 million barrels a day by 2015."
However, the minister said producers need to be "cautious" of demand projections.
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