LONDON/NEW YORK – Oil consumers have enough crude supply and the risk to global demand growth remains skewed to the downside, exporter group OPEC said Tuesday, in a report that builds a case against any use of strategic reserves by consumer nations to lower prices. The Organization of the Petroleum Exporting Countries said its production rose by about 260,000 barrels per day (bpd) in August, despite a European Union embargo on Iran's exports, due to higher output from other members of the 12-member group. OPEC's report comes as the United States and other consumer nations are worried about high oil prices, which have risen to $115 a barrel for Brent crude. Leaders of the Group of Eight major economies have signaled their readiness to tap into emergency oil stockpiles if needed. But OPEC said it saw enough crude oil in the market, a day after similar remarks by Saudi Arabia which were seen by some in the market as a signal to consumers there was no need for a release of emergency reserves. “OECD crude oil stocks remain at comfortable levels, especially in the US market,” OPEC said in the report. “As a result, any product shortage could be readily met by higher utilization of idle refinery capacity in a market with abundant crude supplies.” Analyst Sam Ciszuk of UK-based consultant KBC Energy Economics said the report signaled OPEC's dislike of any use of emergency stocks, such as the US Strategic Petroleum Reserve (SPR), and agreed with OPEC that supply was ample. “OPEC itself is never really happy with SPR releases,” Ciszuk said. “Our view is also that supply is sufficient for the moment. When you look at the stocks situation, it is not problematic.” OPEC's report is the first of this month's trio of major oil outlooks to emerge. The US government's Energy Information Administration issues its report later Tuesday, followed by the International Energy Agency Wednesday. The rebound in OPEC output last month was driven mainly by extra barrels from Angola and Nigeria - and the lack of a further sizeable decline in Iranian supply. Citing secondary sources, OPEC said its production rose to 31.41 million bpd in August from 31.15 million bpd in July. Iranian supply last month was 2.77 million bpd, versus 2.78 million bpd in July because of European and US sanctions over its disputed nuclear program. Output also declined in Saudi Arabia, which told OPEC it had trimmed supply by 50,000 bpd to 9.75 million bpd in August. OPEC now expects demand for its crude to average 29.55 million bpd in 2013 - unchanged from last month and significantly less than it is pumping at present. Also in the report, OPEC left its forecast for the growth in world oil demand next year unchanged at 810,000 bpd and repeated the view from last month's report that oil use could undershoot the estimate by 20 percent. “The economic picture is vague and there are plenty of potential uncertainties going forward,” OPEC said. “Downside risks exist as the spillover from the slowing global economy could reach some regions of the non-OECD.” However, the US Energy Information Administration said Tuesday that members of the Organization of Petroleum Exporting Countries saw their crude-oil output drop slightly in August due to production declines in Saudi Arabia and Iran, OPEC produced an average of 30.65 million barrels a day of crude oil in August, down from the 30.7 million barrels a day produced in July, the EIA said in its monthly Short-Term Energy Outlook. Part of the drop was due to output cuts in Saudi Arabia, where August production fell to 9.7 million barrels a day from 9.9 million barrels a day in July. Iran's production also fell, declining to 2.7 million barrels a day from 2.8 million barrels a day in July, as sanctions from the US and European Union curtailed oil exports and foreign investment in the country. Angola, Nigeria and Libya all increased production in August, the EIA said. OPEC spare crude-oil production capacity rose to 2.3 million barrels a day in August, up from 2.2 million barrels a day in July. Total production capacity rose to 32.95 million barrels a day, the EIA said. By early afternoon in Europe, benchmark crude for October delivery was up 6 cents to $96.60 a barrel in electronic trading on the New York Mercantile Exchange. The contract finished up 12 cents to $96.54 on Monday on the Nymex. In London, Brent crude, used to price international varieties of oil, was up 9 cents to $114.90 on the ICE Futures exchange. US retail gasoline prices gained this week by the least in two months and may have reached a peak after catching up to a $19-a-barrel surge in crude costs. The national average for regular gasoline climbed 0.4 cent to $3.847 a gallon from a week earlier, the smallest increase since prices began rising July 9, the US Energy Information Administration said in a report posted on its website Monday. Prices were up 5.1 percent from $3.661 a year earlier. Retail gasoline has advanced 49 cents a gallon in the past 10 weeks, tracking New York crude futures that have risen 25 percent from the 2012 intraday low on speculation that European and US leaders will take measures to improve economic conditions. Oil prices have been fluctuating around $95 a barrel since mid-August, tempering the rise in retail prices. Oil for October delivery on the New York Mercantile Exchange was at $96.22 a barrel in electronic trading today. Futures gained 12 cents to settle at $96.54 a barrel yesterday. Prices fell as low as $77.28 on June 28. – SG/Agencies
