VIENNA - Oil demand is picking up as global recovery strengthens, allowing OPEC to take no action on supply this year, the group's biggest producer Saudi Arabia said as the producers prepared to rubber stamp existing targets. "We have been sailing very well and we will continue to sail very well," Ali al-Naimi told reporters on Tuesday, as other members voiced concern OPEC is pumping too much oil. In December 2008 OPEC members said they would slash 4.2 million barrels per day (bpd) from output to curb supply at 24.84 million bpd as the chill of recession threatened to shrivel oil demand. But with rising prices in the last year and a hesitant global recovery, revenue-hungry OPEC members have increased supply. In February, OPEC delivered just 53 percent of the pledged output curbs -- down from 81 percent a year ago. Saudi Arabia pumps more than double Iran, its nearest competitor in OPEC. But it has more closely adhered to its target of 8.05 million barrels per day (bpd) than many other members. Naimi said on Tuesday the kingdom was producing 8.0-8.1 million bpd -- well below capacity and giving it the greatest ability among members to altering crude supplies. "The fact that there is still a need to maintain output cuts through 2010 and the narrow distribution of spare capacity, means that Saudi price preferences and output decisions will be the key question" in the future, Eurasia Group wrote in a note.
