A top Organization of Petroleum Exporting Countries official said yesterday that the group was expected to increase its production capacity by 5.5 million barrels per day by the year 2009.
OPEC Secretary General Adnan Shihab-Eldin made the remarks at a meeting of the 21-member Asia-Pacific Economic Cooperation (APEC) forum on energy and mining in this southeastern city.
"Combined with a plan to increase production from OPEC from 32.5 million barrels a day to 38 million barrels a day by the year 2009 and an additional 1.5 million barrels a day of National Gas Liquids coming also from OPEC over the same period ... accumulative world oil production capacity [including non-OPEC countries] will rise by around 12 million barrels a day over that period," he said.
"This will be, in our opinion, above the expected cumulative rise in demand over that period which is estimated at to be around seven to eight million barrels a day ... This will be more than enough to cover the forecast growth in demand," he added.
OPEC said on Monday that its 11 members, which jointly supply more than a third of global oil, had produced 30.34 million bpd on average during last month, an increase of 130,000 bpd from August.
Noting a decline in production growth in non-OPEC countries, OPEC said these producers, led by Russia, would produce an average 50.3 million bpd this year, slightly less than a previous estimate of 50.4 million bpd.
Asked to comment on the outlook of oil prices, he said prices would moderate from the current high level.
"For the short term, I'm not seeing prices go below US$40 a barrel but I'm seeing prices could moderate below the current 70 or 60 level ... perhaps to go down to the 50s," he said.
"Where the prices will come under pressure is not from the supply [side] of crude .. they will come under pressure because of downstream problems and shortages," he said at a press conference.
Following his meeting with his South Korean host, Shihab-Eldin urged oil consuming countries to expand refining facilities quickly to fight high energy prices.
He stressed there is spare crude available to be turned into products.
He also brushed aside allegations that high oil prices are a main drain on the global economy.
"High oil has yet affected the economic growth," he said, noting the International Monetary Fund predicted a 4.3 percent growth for the world economy this year and four percent next year.