OPEC: Global Oil Supply Outpacing Demand

Posted May 10th, 2012 at 3:15 pm (UTC-5)
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The oil cartel OPEC says the global supply of oil is exceeding demand and that member countries are pumping oil at the fastest rate in nearly four years.

The Organization of the Petroleum Exporting Countries said Thursday that its 12 member countries produced more than 32 million barrels of oil in March, up more than 300,000 barrels of crude from February. OPEC produces about a third of the world's oil and its March production was its highest since mid-2008.

The cartel said that its increased production, along with oil produced by other countries, helped boost the global supply in the early months of the year beyond world demand.

With Europe's 17-nation euro currency bloc in a mild recession and modest economic growth in the United States, the demand for oil has diminished in recent months.

But OPEC says the decline in demand has stopped, with the U.S. economy, the world's largest, stabilizing and Japan needing more oil after shutting down its nuclear power plants. OPEC slightly increased its projection for daily global demand this year to nearly 89 million barrels a day, but said the world's economic outlook remains fragile.

Earlier in the year, analysts voiced fears that tensions between the West and oil-exporting Iran over Tehran's nuclear program would lead to sharply higher oil prices and a world oil shortage. But global oil prices have fallen from their high levels of a few weeks ago.