The Organization of Petroleum Exporting Countries forecast the world will need less of its crude next year, even as global oil demand growth rebounds to its strongest pace since 2010, amid competing supply sources.
Demand for OPEC’s crude will slip by 300,000 barrels a day next year to 29.6 million a day next year, or about 2.6 percent less than the 12-member group is pumping now, the organization said in its first set of forecasts for 2014. The need for OPEC’s crude will diminish even as global oil demand growth recovers to 1 million barrels a day in 2014, from 800,000 a day this year, amid rising output in the U.S. (DOETCRUD) and Canada.
“The strong growth trend seen in 2013 is expected to continue in 2014” for production from outside OPEC, the organization’s Vienna-based secretariat said in its monthly market report today.
Dependence on OPEC’s crude is slipping as the U.S. and Canada unlock unconventional oil supplies from deep underground shale deposits with new drilling techniques. Brent crude futures have slipped 2.7 percent this year, trading at about $108 a barrel on the London-based ICE Futures Europe exchange today, amid signs of slowing growth in China and uneven recovery in the U.S., the world’s biggest oil consumers.
World oil consumption will advance by 1 million barrels a day, or 1.2 percent to 90.7 million next year as emerging nations expand and developed economies continue to recover, the organization said. Demand estimates for 2013 were kept mostly unchanged, with an anticipated growth rate of about 800,000 barrels a day, or 0.9 percent, to 89.6 million.
“Higher growth in the U.S. and a recovery in the euro zone are the main drivers behind the forecast,” OPEC said. “Emerging economies continue to expand at levels below the high rates seen in past years.”
Supplies from outside OPEC will increase by 1.1 million barrels a day next year to 55.1 million, compared with an increase of 1 million estimated for this year, according to the report. The expansion will be led by the U.S. and Canada, and assisted by nations including Brazil, Kazakhstan and South Sudan.
Estimates for non-OPEC supply expansion are “associated with a high level of risk,” as a range of political, technical and price-related dangers may cause output to increase less than forecast, according to OPEC.
OPEC’s 12 members cut production by 309,100 barrels a day to 30.38 million in June as disruptions in Libya curbed the North African nation’s output by 206,700 barrels a day to 1.2 million, data from the report showed. The next-largest reductions were in Nigeria and Angola. Saudi Arabia (OPCRSAUD), the group’s biggest member and de facto leader, boosted output by 50,000 barrels a day to 9.6 million.
Group production is about 380,000 barrels a day higher than the collective target of 30 million a day, which the organization ratified for a third time at its most recent meeting on May 31.
OPEC’s members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. They will meet next on Dec. 4 in Vienna.
The International Energy Agency, an adviser to oil-consuming nations, will publish its first assessments for 2014 in a report published at 10 a.m. Paris time tomorrow.