Support for cut in Opec oil output
EMBATTLED Opec oil ministers have received some welcome support for their controversial decision to shave output by one million barrels a day this spring.
As oil prices held last night's highs, with US light crude up 12 cents to $33.99, the International Energy Agency today indicated Opec's move is justified given a likely build-up in crude stocks worldwide.
In its monthly report on the oil market, written before Opec's meeting yesterday, the Paris-based agency said stocks across the Western world were 'already trending towards more comfortable levels'.
It added: 'Barring an unforeseen surge in demand or disruption to supply, Opec may need to revisit their production target for the second quarter, unless they are content to see stocks build markedly.'
US officials slammed Opec last night after the cartel decided to cut its output quota to 23.5m barrels a day from 1 April to support crude prices during the traditionally-weak second quarter.
In a strong warning to the cartel, US Treasury Secretary John Snow said any decrease in oil output would be 'regrettable' and risked stunting the global economy's recovery.
But demand for crude typically drops by about three million barrels a day worldwide from April as the northern hemisphere's winter draws to a close.
The IEA's support comes despite its forecast that growth in global crude oil demand will be 220,000 barrels a day higher than forecast this year due to China's rapid economic expansion.
