Iran says oil market oversupplied
TEHRAN -- The oil market is currently oversupplied by 1.5 MMbopd, a situation that is contributing to weak prices, a top Iranian official said Friday.
He was speaking after oil prices this week fell under the key threshold of $100/bbl and as the Organization of the Petroleum Exporting Countries prepares to discuss its output May 31.
"Demand is 1.5 million barrels a day less than supply," Muhammad Ali Khatibi, Iran's OPEC governor told Dow Jones Newswires. "Now the market is oversupplied."
Mr. Khatibi blamed weak demand--tied to a seasonal shutdown of refineries for maintenance and a sluggish economic performance--and strong supply, notably rising U.S. shale oil production.
"The market is weak and that brings the price down," he said.
Oil prices this week fell below $100/bbl--the level Iran and other OPEC members see as acceptable for both producers and consumers.
The Iranian official said it was up to OPEC's ministers to decide whether they need to cut production or not when they meet in Vienna next month.
However, Mr. Khatibi said the market could regain its balance in the second-half of the year as refineries come back online and oil demand bounces back as a result.
Dow Jones Newswires