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31 August 2012 | Anna Reynolds
Finance ministers from the G7 industrialised nations have urged oil producing countries to increase their output as the price of the commodity has risen by almost 17 per cent in August.
According to the commodity exchange CME Group the price of crude oil has increased from around $83 per barrel (£52.46) in June to almost $97 (£61.31) in August this year. The OPEC daily basket price was $110.66 (£69.95) yesterday.
In a statement the G7 - which comprise of the finance ministers of the US, UK France, Germany, Canada, Italy and Japan - said: “The current rise in oil prices reflects geopolitical concerns and certain supply disruptions. We encourage oil producing countries to increase their output to meet demand. We stand ready to call upon the International Energy Agency (IEA) to take appropriate action to ensure that the market is fully and timely supplied.”
The IEA’s own August Oil Market Report cut expectations for demand in 2012/2013 by 300-400 thousand barrels per day (kb/d), although annual growth remains in the range of 800-900 kb/d over the two years.
The report also suggests global oil stocks have grown steadily in the first half of 2012, although in OECD countries stock have been falling. Combined with slim spare capacity from OPEC (the Organization of the Petroleum Exporting Countries), and a series of geopolitical issues confronting several OPEC producers, the price of crude oil has stayed strong through July and early-August.
Meanwhile consumers appear to have slashed imports of Iranian oil to around one million barrels per day in July 2012, but the OMR suggested imports from the country would rise again if constraints against shipping Iranian oil ease in the months ahead.