Opec is thinking of increasing its oil production in the wake of increasing global demand. The refinery demand has increased in the past few years. Faith Birol, chief economist for the International Energy Agency (IEA), said that there is an urgent need for more oil in the market and hope that oil producing countries are reading the signals. Globally, a rise in oil prices is witnessed, especially in US and China. If Opec is able to increase production, it could prevent the oil prices from rising any further. However, the production would only be of one million bpd.
Traders are apprehensive of such move. They observe that any respite from the current trend of prices can happen only if the production level is improved by about one million bpd and not a mere increase set by the Opec two years ago.
Opec?s 11 members, other than Iraq, had a production target of 26.23 million bpd in May, which is nearly 1.4 million bpd above their 24.84 million bpd target. According to IEA data, the total global demand for oil is expected to rise from 88.21 million bpd in the current quarter to 89.91 million bpd in the third quarter and to 90.16 million bpd in the last quarter of 2011.
Birol?commented that the global refinery demand is likely to?grow by 3-3.5 million barrels a day?in the next quarter, while?the refiners have?ramped up strategies?to meet seasonal higher?oil demand, which also includes the?driving season in the US. Also an ongoing drought in China is?likely?to increase the?use of diesel generators for power generation in country.