Nomura Says IEA May Be Overestimating Outlook for Non-OPEC Crude Supplies
The International Energy Agency may be overestimating the outlook next year for oil supply excluding crude produced by the Organization of Petroleum Exporting Countries, according to Nomura International Ltd.
The Paris-based energy adviser last month forecast that crude supply from non-OPEC countries will increase by about 800,000 barrels in 2011 while the group’s production of natural gas liquids, which aren’t part of its crude output, will rise by about 700,000 barrels day.
“The IEA’s estimates are on the aggressive side,” Nomura analysts Michael Lo and Cheng Khoo said in the note e-mailed today. “OPEC NGL might come in lower than expected given current weakness in the natural gas market.”
Qatar, U.A.E, Saudi Arabia, Iran and Algeria may not contribute to the output increase as much as the IEA forecasts because oversupply in the natural-gas market may delay projects that extract liquid fuels while producing methane, Nomura said.
“Production ramp-up could be slower than expected since the gas is not fully contracted, which will result in lower natural gas liquids output,” the analysts said.
Output decline rates in the former Soviet Union may accelerate to 4.6 percent next year from the 2.2 percent average of 2002 to 2009, because of a lack of incentives to increase exploration, Nomura said, citing Wood Mackenzie Consultants Ltd.
To contact the reporter on this story: Dinakar Sethuraman in Singapore at dinakar@bloomberg.net
To contact the editor responsible for this story: Clyde Russell at crussell7@bloomberg.net
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