OIL cartel Opec has hinted that it may increase production if supplies drop and the global economy begins to recover.
The organisation, which speaks for countries supplying a third of the world's crude, cut its combined production by three million barrels a day during the recession, as oil prices slumped by more than two-thirds.
Yesterday, Opec secretary-general
Abdullah al-Badri said a sustainable recovery in the crude price – which hit $80 a barrel this week – would inevitably lead to the 12-member organisation voting to increase production.
"If these prices continue, if we see the stocks go back to normal levels – the five-year average – if we see there is real economic growth, I am sure our member countries will take a decision to increase the production," Badri said in London yesterday.
Earlier this week, another Opec official told an oil conference in London that the recent rally in crude oil prices was not supported by fundamental demand levels, suggesting that speculation by traders may be playing a part. Badri said that Opec was likely to wait until it saw signs of a strengthening economy and a shortage of supplies before acting.
"The market is improving, but we would like to see evidence," he said. "If we see a shortage, Opec will not hesitate to increase the production."
Oil ministers hold their next meeting to decide on production levels in Angola on 22 December.
Crude oil reached a record $147 a barrel in July 2008, before falling below $39 a barrel at the start of the year.
This week, crude hit the highest level so far in 2009, briefly nudging above $81 a barrel, despite analysts repeatedly warning that demand levels do not support the rise.
