OPEC warns of oil supply gap

In its monthly report published Friday, OPEC said world demand for its oil would average 30.7 million barrels per day (bpd) in the second half of the year, much higher than the 28.97 million bpd the 12-member group produced in May.

The figures suggest the world will be undersupplied by 1.73 million bpd - enough to meet demand in an economy the size of France - if the Organization of the Petroleum Exporting Countries does not increase supplies.

"Looking to the remainder of this year, the expected supply/demand balance indicates a tightening market," OPEC's report said. "As a result, global inventories could continue to decline as the market enters a period of high seasonal demand."

OPEC, source of more than a third of the world's oil, met in Vienna for the first time this year on Wednesday and for the first time in around a decade failed to make a decision on output policy.

The group's Secretary General Abdullah Al-Badri said after the meeting members had different numbers and were unable to agree on any need for more oil. Analysts said political tension also played a part in the split.

Oil prices fell on Friday as Saudi Arabia began offering more oil to customers, easing worries about supply. Brent crude was down more than 50 cents and trading below $119 a barrel.

The supply gap seen by OPEC's report is even larger than that of the International Energy Agency, which advises consuming countries and had lobbied OPEC to raise its oil output before its meeting; Kazinform cites Arab News.

For full version go to www.arabnews.com