Wednesday, May 14, 2008
DUBAI (Dow Jones)–Iran is storing about 25 million barrels of heavy crude oil in tankers in the Persian Gulf as no buyers are stepping up to the plate, the country’s departing OPECOPECLoading… governor, Hossein Kazempour Ardebili, said Tuesday.
“We are using about 10-12 vessels to store the crude,” Ardebili told Dow Jones Newswires in an exclusive interview by phone from Tehran.
The stored crude is “the main proof that the market is oversupplied” and that prices are disconnected from fundamentals, he said.
“I know other countries are building up stocks as well, there are simply no buyers because the market has more than enough oil,” Ardebili, who resigned as the country’s governor to the Organization of Petroleum Exporting CountriesOrganization of Petroleum Exporting Countries
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earlier this week after over 23 years in the position, said.
However, decreasing production is not an option, he added.
“We believe that this build up should serve at assuring the market that the oil is there if needed,” Ardebili said.
He added that Iran’s current production level is 4.1 million barrels a day, while production capacity is at about 4.3 million barrels a day.
Nymex June crude was trading down 15 cents at $125.65 a barrel on Wednesday, while ICE June Brent was trading down 19 cents at $123.91 a barrel.
-By Majdoline Hatoum, Dow Jones Newswires; +9714-3644964; majdoline.hatoum@dowjones.com
Copyright (c) 2008 Dow Jones & Company, Inc.
(END) Dow Jones Newswires
14-05-08 0824GMT
