The Organization of Petroleum Exporting Countries said the global oil market is “well-supplied,” and trimmed demand estimates for its crude in 2014 as production outside the group increases.
OPEC will need to provide an average 29.6 million barrels a day next year, reducing its estimate “slightly” from last month, the group said today in its market report. OPEC’s 12 members pumped about 600,000 barrels a day more than this level in August. OPEC boosted forecasts for output from other producers amid supply growth in the U.S., Mexico and Norway.
“The market at present remains well-supplied,” the organization’s Vienna-based secretariat said. “Crude stocks should gradually begin to build as refiners head into maintenance at the end of the third quarter.”
Brent crude has advanced about 1.9 percent this year, trading at $113.19 a barrel on the ICE Futures Europe in London today. Prices were boosted as the U.S. recovery gathers pace, Europe emerges from recession and Libyan supplies are crimped by protests. Unrest in Syria also threatens Middle Eastern oil exports. OPEC is next due to meet for a review of production targets on Dec. 4 in Vienna.
Inventories of crude and refined products in the world’s most industrialized nations are “comfortable,” equating to about 58.5 days of consumption, while rising stockpiles in emerging nations “should also provide a further cushion to the market, complementing existing and expanding crude production capacity,” according to the report.
The organization boosted projections for supplies from non-OPEC producers, by 130,000 barrels a day, as stronger-than-expected growth this year in the U.S., Mexico and Norway feeds into the 2014 forecast. Non-OPEC nations will bolster output by 1.2 million barrels to 55.2 million a day in 2014, according to the report.
OPEC said its production fell by 123,900 barrels a day to 30.2 million last month as labor unrest cut Libya’s output by 477,700 barrels a day, based on data from secondary sources. The losses outweighed higher production by OPEC’s biggest member, Saudi Arabia, which boosted output by 188,500 barrels a day to 9.96 million, and an increase in Iraq, by 132,800 barrels a day to 3.1 million.
Saudi Arabia pumped 10.19 million barrels last month, the kingdom said in direct communications with the organization.
Global oil demand will increase by 1 million barrels a day, or 1.2 percent, to 90.77 million a day next year, OPEC said, keeping its forecast unchanged from last month.
The International Energy Agency will release its monthly report on Sept. 12.
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