OREANDA-NEWS. The chief financial officers of BP and Shell both said today that global crude production and demand are already in balance, relegating any production constraints that Opec may conjure up at its 30 November meeting to a fringe role.

The executives were talking separately in conference calls following release of their respective company results and days after Opec members failed to agree on the parameters or share-out of a proposed production ceiling in a range of 32.5mn-33mn b/d.

BP's Brian Gilvary said: "The physical market appears to have moved broadly into balance, with the amount of oil produced each day broadly in line with daily consumption. Nevertheless, oil inventories are at record levels and will still take some time to reduce. Looking ahead, we expect inventories to decline gradually next year, supported by continued demand growth and sustained weakness in non-Opec supply. The precise pace and timing of that decline will depend on the outcome of Opec's meeting at the end of November."

And Shell's Simon Henry commented that:"Supply and demand are roughly back in balance. In fact if anything supply was behind demand in the last 3-4 months." He added that: "The next 12 months looks roughly balanced. If Opec were to make an agreement that took supply down, almost by definition there would be a slight shortage. There are huge inventories, still 500mn bl of excess inventory to work down. But markets are funny things. Once momentum starts, then prices can move quickly. We are not speculating on any of this. We are planning next year on a $50/bl oil price."