OPEC president says oil markets well-supplied

Dubai, Apr 16: OPEC President Mohammed al-Hamli said on Monday that global oil markets were well-supplied but the group stood ready to lift output if needed.

''Oil supply is adequate. The market is well-supplied,'' he said in response to a question about falling U.S. inventories and concern that stocks would not build as much as they typically do during the second quarter.

''We are ready to supply more if the market needs more.'' OPEC, which pumps over a third of the world's oil, agreed to maintain supply curbs of 1.7 million barrels per day (bpd) at its last policy meeting a month ago. Prices have rallied since, with Brent crude climbing nearly to trade near a barrel.

U.S. light sweet crude, trading near a barrel on Monday, has seen slimmer gains due to swollen stockpiles at the delivery point for the contract, putting it at a record nearly discount versus European Brent last week.

Hamli said that the growing price gap between the world's two benchmark crudes was due to a lack of liquidity.

''The price of Brent I know is very high, due to illiquidity.

Normally we don't see such a large differential between WTI and Brent,'' he said.

U.S. crude, usually more expensive due in part to its higher quality, has been weighed down by rising Canadian shipments and refinery problems while its UK rival has risen more in response to geopolitical risks in Iran and Nigeria.

Hamli, who is also the energy minister for the United Arab Emirates, said that rising costs of equipment and raw materials and labour shortages were also making it hard for producers to build new capacity.

''The fact that the market is relatively balanced does not mean producers are not facing difficulties meeting their responsibility,'' he told an energy conference in Dubai.

Energy policies in some consuming nations were taking investment away from oil to other fields such as coal, while statements from some consumers that they intend to reduce their reliance on crude did not encourage investment either, he said.

The United States, the world's largest energy consumer, has said it wants to reduce its dependence on crude imports.

Reuters