VIENNA, July 17, 2006 (AFP) – Developments in the oil industry should help cool crude prices in 2007 but the market will remain vulnerable to geopolitical tensions, OPEC said in its July report published Monday.
“The expected increase in OPEC capacity, combined with the projected decline in required OPEC crude, should help to moderate prices,” the Organization of the Petroleum Exporting Countries said.
“Whether the market will benefit from the full effect of these trends will depend mainly on downstream developments and non-fundamental factors, particularly geopolitical tensions, a major factor behind the current record high oil prices,” it added.
OPEC capacity is expected to increase by 1.0 million bpd to 34.3. million bpd by end-2007 but demand for the cartel’s oil is set to drop to an average 28.1 million bpd, down 600,000 bpd from the estimate for 2006, due in part to high oil prices and slower economic growth, the report said.
Non-OPEC supply in 2007 is set to increase by 1.7 million bpd, to 53.1 million bpd, compared to 51.4 million bpd in 2006, mainly helped by Africa, North America and Latin America, the organisation said.
Monday, oil prices remained high as violence continued t