EHRAN, Sept. 4 (Mehr News Agency) - The oil market is floating into a hope and fear situation, so a clear future of the market could not be pictured, Iran's OPEC governor warned here on Friday.
SHANA news agency quoted Mohammad-Ali Khatibi as saying that, "Oil prices are contingent upon varied factors such as global economy, rising demand, oil supply by OPEC and non-OPEC countries, and stock levels. The first three are among the encouraging factors and the last is a discouraging one."
He went on to note that OPEC should find a solution to normalize the stock levels.
According to Khatibi, demand for oil produced by OPEC is expected to be around 28 million barrels a day in the first quarter of 2010, which suggests a supply surplus if OPEC production remains at current levels, Zawya Dow Jones reported.
"If OPEC continues this production, stockpiles will build by 700,000 barrels per day, so this will be brought to the attention of ministers," Khatibi said. An OPEC meeting on production quotas is expected next week in Vienna.
Previously, Khatibi had stated that bulging global oil inventories remains a major concern for OPEC member states, even as signs of a possible global economic recovery grow, and will probably be a topic at the meeting, Reuters reported.
"Everyone is worried about the current stock levels... for both the Organization for Economic Co-operation and Development (OECD) countries and floating storage," he added.
"It may be considered by ministers a policy within one year, maybe a lower or higher period, to bring stock levels back down to normal," he explained.
The International Energy Agency (IEA) said in its August report, stocks in developed countries stood at around 61.7 days of forward cover at the end of June, unchanged from the previous month and only just below a peak of 62.4 days at the end of March.
OPEC members have in the past said they would be much more comfortable if stock levels came back to a five-year average of around 52 days and Khatibi reiterated that.
"The five-year average for OECD stock levels is a good base, anything higher than that is risky," he said.
In addition to high stocks on land, millions of barrels of fuel have been stored at sea.
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