OPEC: Demand outstrips oil supply
Source: Bloomberg News |
June 11, 2011, Saturday
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OPEC yesterday forecast a "tightening" oil market as demand for its crude rises, two days after members of the producer group failed to agree on output increases.
The Organization of Petroleum Exporting Countries will need to pump 30.9 million barrels a day in the third quarter, 1.9 million more than it supplied last month, the group's Vienna-based secretariat said yesterday in a monthly report. A meeting of OPEC's 12 members on Wednesday broke up without an accord, the first time in at least 20 years that they couldn't agree on quotas.
"Global inventories could continue to decline as the market enters a period of high seasonal demand," the group said in the report. "This would result in much higher demand for OPEC crude, reaching a level higher than current OPEC production and implying a draw in inventories."
Saudi Arabia and three other Persian Gulf states wanted to boost output by 1.5 million barrels a day at the gathering. Six nations, including Iran and Venezuela, did not think it was necessary.
Saudi Arabian Oil Minister Ali al-Naimi described the talks as "one of the worst meetings we've ever had."
Brent crude futures has rallied 26 percent this year as an armed conflict halts exports from Libya. OPEC members, led by Saudi Arabia, have boosted production to compensate, with group output in May rising 170,600 barrels a day to average 28.97 million.
Global crude demand will increase by 1.4 million barrels a day, or 1.6 percent, to average 88.1 million a day this year, according to OPEC. That's 60,000 barrels a day more than it predicted last month, meaning it will need to provide 29.9 million a day this year, or 300,000 barrels more than in 2010.
OPEC made a "minor upward revision" to its outlook for supplies from outside the organization this year. Non-OPEC producers will boost production by 660,000 barrels a day to average 52.92 million a day this year, it said.
The International Energy Agency, an adviser to consuming nations, will release its monthly estimates of supply and demand next Thursday.
OPEC's members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. Iraq is exempt from the quota system.
The Organization of Petroleum Exporting Countries will need to pump 30.9 million barrels a day in the third quarter, 1.9 million more than it supplied last month, the group's Vienna-based secretariat said yesterday in a monthly report. A meeting of OPEC's 12 members on Wednesday broke up without an accord, the first time in at least 20 years that they couldn't agree on quotas.
"Global inventories could continue to decline as the market enters a period of high seasonal demand," the group said in the report. "This would result in much higher demand for OPEC crude, reaching a level higher than current OPEC production and implying a draw in inventories."
Saudi Arabia and three other Persian Gulf states wanted to boost output by 1.5 million barrels a day at the gathering. Six nations, including Iran and Venezuela, did not think it was necessary.
Saudi Arabian Oil Minister Ali al-Naimi described the talks as "one of the worst meetings we've ever had."
Brent crude futures has rallied 26 percent this year as an armed conflict halts exports from Libya. OPEC members, led by Saudi Arabia, have boosted production to compensate, with group output in May rising 170,600 barrels a day to average 28.97 million.
Global crude demand will increase by 1.4 million barrels a day, or 1.6 percent, to average 88.1 million a day this year, according to OPEC. That's 60,000 barrels a day more than it predicted last month, meaning it will need to provide 29.9 million a day this year, or 300,000 barrels more than in 2010.
OPEC made a "minor upward revision" to its outlook for supplies from outside the organization this year. Non-OPEC producers will boost production by 660,000 barrels a day to average 52.92 million a day this year, it said.
The International Energy Agency, an adviser to consuming nations, will release its monthly estimates of supply and demand next Thursday.
OPEC's members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. Iraq is exempt from the quota system.
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