Bodman, on his first trip to the Middle East, had on Saturday also urged Gulf OPEC producers to spell out their production expansion plans to reassure the world that future demand would be met. I think our view is the market needs to continue to be adequately supplied, EIA administrator Guy Caruso said. There is a lot of uncertainty about demand and therefore its best to let the market determine how much it wants to take up.
Our outlook doesnt indicate any cutback would be necessary, our latest short-term outlook, he told reporters in Dubai when asked if Opec would be justified in cutting output. US oil prices are more than $13 below a late-August record of $70.85 touched in the wake of hurricane damage. On Friday they fell below $58 to the lowest level since July as swelling fuel stocks eased consumer fears of tight winter supplies.
The Organisation of the Petroleum Exporting Countries meets in December in Kuwait and the cartel has yet to signal at what level it would consider cutting production to shore up prices. In September, Opec offered the market its spare capacity, the lions share of which is held by Saudi Arabia, from Oct. 1 for three months, but says there have been no takers.
In our outlook we only have two million barrels per day of spare capacity, most of which will be in Saudi Arabia and most of which will be sour, Caruso said. We continue to see that as a pretty tight market. Bodman who was in the United Arab Emirates on a tour that will include fellow Opec producers Kuwait, Qatar and Saudi Arabia has urged Gulf Arab states to issue a joint statement detailing plans to increase oil output and refining capacity.
He said this would boost confidence that there will be production made available in the future and stabilise prices.