By Robert Tuttle
OPEC sees a possible drop in energy demand caused by a weaker world economy as its “main area of concern” for the next several months, the group’s secretary-general said.
“As we approach the end of 2013 and into next year, we need to remain vigilant,” Abdalla El-Badri said at a conference today in Muscat, Oman. “The economy remains the major worry, particularly in the short and medium term.”
While the Organization of Petroleum Exporting Countries expects global economic growth to accelerate to 3.5 percent in 2014 from 2.9 percent this year, Europe faces a “major challenge” in its labor market, and growth in China and India has slowed, he said. A possible easing of U.S. monetary stimulus threatens investment in developing countries, El-Badri said.
OPEC, supplier of about 40 percent of world oil, plans to meet on Dec. 4 to review output levels and policy. The International Energy Agency, an adviser to rich energy-importing nations, trimmed its forecast earlier this month for growth in global demand in 2014 to 1.1 million barrels a day, or 1.2 percent. That’s about 100,000 barrels a day less than the IEA predicted in September.
Brent crude future in London have averaged $108.60 a barrel this year amid supply disruptions in Libya, Syria and the North Sea and a European Union embargo on purchases of Iranian crude. The halts and interruptions have had “limited impact,” and prices in the range of $100 to $110 are “acceptable to producers and consumers alike,” El-Badri said.
North Sea Brent, a benchmark for more than half of the world’s crude, was at $109.94 a barrel at 2:30 p.m. today in London on the ICE Futures Europe exchange.
The IEA said this month that non-OPEC oil producers led by the U.S., Canada and Kazakhstan will augment supplies next year by the most since the 1970s.
“There has been and there remains more than enough supply to meet demand,” El-Badri said. “This is the case for the rest of 2013 and 2014.”
OPEC’s spare production capacity will stay at “comfortable levels” for the “foreseeable future,” he said.
The group’s 12 members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.
ALEXANDER KLEIN / AFP/Getty Images
Jan. - June 2013: $466 billion
2012: $982 billion
[Photo: Iraq's Minister of Oil and President of the Organization of the Petroleum Exporting Countries (OPEC) conference, Abdul-Kareem Luaibi Bahedh (2R) and OPEC Secretary General Abdalla Salem El-Badri (R) attend a press conference at the end of the 161st meeting of the OPEC in Vienna, on June 14, 2012. ]
Dolores Ochoa / Associated Press
Jan. - June 2013: $5 billion
2012: $10 billion
[Photo: An indigenous man and woman walk across the highlands with Ecuador's national flag to join a protest against nationwide mining in Chimborazo, Ecuador, Saturday March 17, 2012.]
LEON NEAL / Getty
Jan. - June 2013: $24 billion
2012: $51 billion
[Photo: The new Libyan flag flutters outside an oil refinery in Zawiya, Libya.]
Ronald Zak / Associated Press
Jan. - June 2013: $26 billion
2012: $55 billion
[Photo: Qatar's Minister of Energy and Industry Mohammed Bin Saleh Al-Sada speaks to journalists prior to the start of the meeting of the Organization of the Petroleum Exporting Countries, OPEC, at their headquarters in Vienna, Austria, on Thursday, June 14, 2012.]
via Bloomberg News
Jan. - June 2013: $29 billion
2012: $62 billion
[Photo: An Anadarko oil drilling rig in Algeria's Sahara Desert. ]
JUAN BARRETO / AFP/Getty Images
Jan. - June 2013: $30 billion
2012: $62 billion
[Photo: Venezuela's President Nicolas Maduro (C), flanked by the country's Minister of Petroleum and Mining and president of the state owned oil company PDVSA, Rafael Ramirez (L) and Foreign Minister Elias Jaua, speaks during the opening of the Petrocaribe Summit, in Caracas on May 5, 2013.]
RONALD ZAK / AP
Jan. - June 2013: $33 billion
2012: $68 billion
[Photo: Secretary-General of OPEC Abdalla Salem El Badri walks by Minister of Petroleum Jose Maria Botelho de Vasconcelos from Angola at a news conference following a meeting of the ministers of the Organization of Petroleum Exporting Countries at its headquarters in Vienna, Austria, on Sunday, March 15, 2009.]
Nabil al-Jurani / Associated Press
Jan. - June 2013: $43 billion
2012: $83 billion
[Photo: Iraqi workers at the Rumaila oil refinery, near the city of Basra, Iraq.]
Ronald Zak / Associated Press
Jan. - June 2013: $44 billion
2012: $88 billion
[Photo: Minister of Oil from Kuwait Hani Abdulaziz Hussain speaks to journalists prior to the start of the meeting of the Organization of the Petroleum Exporting Countries, OPEC, at their headquarters in Vienna, Austria, on Thursday, June 14, 2012.]
PIUS UTOMI EKPEI / AFP/Getty Images
Jan. - June 2013: $42 billion
2012: $93 billion
[Photo: Shell's major oil and gas terminal on Bonny Island in southern Nigeria's Niger Delta. ]
Kamran Jebreili / Associated Press
2. United Arab Emirates
Jan. - June 2013: $48 billion
2012: $100 billion
[Photo: A ship docks at the refueling station in Fujairah, United Arab Emirates, Wednesday, May 30, 2012.]
Hasan Jamali / AP
1. Saudi Arabia
Jan. - June 2013: $142 billion
2012: $311 billion
[Photo: Camels gather beyond an oil well near the Khurais oil facility, about 60 miles southeast of Riyadh, Saudi Arabia, Monday, June 23, 2008.]