Opec may start to rein in supplies above its formal output limits if the cartel decides global oil inventories are piling up too quickly, the president of group said today.
Sheikh Ahmad al-Fahd al-Sabah told reporters the group would keep pumping nearly flat out at around 30.3 million barrels per day (bpd) until it meets on June 15th to chart production policy.
But he said Opec could decide then to trim supply in excess of official limits, now running close to one million bpd.
"If the stockbuild is above the agreed-upon levels, which is the five year average, then this may be the start of reducing the overproduction."
Sheikh Ahmad, also Kuwait's oil minister, said oil prices, which have dropped more than $11 since an early April all-time high of $58.28, would also need to be at a "suitable" level before production could be curbed.
Led by Saudi Arabia, Gulf Opec producers have been boosting output steadily since March to build a cushion of stocks ahead of an anticipated fourth-quarter demand surge.
The International Energy Agency, which advises industrialised nations on energy policy, said last week that OECD oil stocks had swelled to 53 days of forward demand cover by the end of March at 2.59 billion barrels.