BackOpec says ample oil supply to persist in 2013
Opec trims forecast for growth in global oil demand by 30,000 bpd to 780,000 bpd
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London: The Organization of the Petroleum Exporting Countries (Opec) trimmed its forecast for world oil demand growth in 2013 due to a slowing global economy and said it expected supply to remain ample, reinforcing its message that producers are doing enough to tackle high prices.
Opec, in a monthly report, trimmed its forecast for growth in world oil demand in 2013 by 30,000 barrels per day (bpd) to 780,000 bpd and said the risk remained skewed to the downside.
A jump in oil prices this year has worried the US and other consuming countries and prompted calls on producers to pump more oil. Crude hit $128 a barrel earlier this year, its highest since 2008, and was trading at $114 on Wednesday.
Opec has maintained supply is adequate and said in its report on Wednesday it was likely to stay so, pointing out this year’s demand forecast has often been cut, while saying supply from producers outside the 12-member group has performed well.
“This trend is not expected to change in the coming year, with the market continuing to be characterized by high volumes of crude supply and increasing production capacity," said the report from Opec’s Vienna headquarters.
Top Opec producer Saudi Arabia made similar remarks on Tuesday, saying stability had been restored to the oil market and it was satisfied oil prices have fallen to a level that does not hamper global growth.
Opec’s report is the first of this month’s trio of major oil outlooks to emerge. The US government’s energy information administration issues its report later on Wednesday, followed by the International Energy Agency on Friday.
Output drop
Extra oil from Saudi Arabia and other Gulf Arab Opec members this year has offset lower supply from fellow Opec country Iran, whose exports have been curbed by Western sanctions.
But Opec’s report said production fell by 265,000 bpd in September to 31.08 million bpd, according to secondary sources cited by the report, led by declines in Angola and Nigeria.
Iranian supply, which fell sharply earlier this year due to a European Union ban on its crude and tighter US sanctions over Tehran’s nuclear programme, was steady in September at 2.72 million bpd.
A Reuters survey on 28 September said Opec output in September fell to 31.09 million bpd.
Despite the drop, Opec is still pumping more oil than the forecast demand for its crude worldwide - and more than the production ceiling of 30 million bpd which the group is supposed to stick to and which it will review at a meeting in December.
Opec expects global demand for its crude to average 29.80 million bpd next year, up 250,000 bpd from last month because of lower supply expectations from some non-Opec producers including India and some African countries.
Much of the growth in non-Opec supply is coming from the US, in the midst of a shale energy boom. Harry Tchilinguirian, analyst at BNP Paribas, thought the cut in non-Opec supply was most significant change in Opec’s forecasts.
“The main takeaway is the perennial risk to non-Opec supply estimates," he said. “The end result is that non-Opec supply growth is both concentrated, and geographically confined in the US and Canada." Reuters
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