OPEC Expects Stockpiles to Keep Rising, Official Says

(Bloomberg) — Oil supply and demand are in balance, and a gradual rise in stockpiles will continue through the second quarter, a Persian Gulf official familiar with Saudi Arabian oil policy said today.

The oil price, which reached a record $102.08 a barrel in New York electronic trading this morning, is higher than it should be and isn’t in line with supply and demand fundamentals, the official said in an interview, speaking on condition of anonymity. Saudi Arabia is the largest influential producer within the Organization of Petroleum Exporting Countries, scheduled to meet on March 5.


“OPEC is taking a cautious view of the supply and demand balance,” said Paul Horsnell, head of commodities research at Barclays Capital in London. “But it seems hard to justify a cut in production, even based on their numbers.”

Futures jumped in New York as the dollar fell to an all- time low against the euro. The UBS Bloomberg Constant Maturity Commodity Index rose to the highest ever, on gains for gold, silver, sugar, copper and coffee. The dollar weakened to $1.5088 a euro, the lowest since the European single currency was introduced in 1999.

Bloomberg