OPEC bolstered forecasts for the amount of crude it will need to provide this year as the economic recovery stokes global fuel consumption. Iraq, its second-largest member, pumped the most oil since 1980.
The Organization of Petroleum Exporting Countries, responsible for 40 percent of the world’s oil supply, said its 12 members will need to produce an average of 29.7 million barrels a day this year, 100,000 a day more than forecast last month. The amount required is about 400,000 barrels a day less than OPEC pumped in February, when output surpassed 30 million a day for the first time since August, the group said citing secondary sources.
“The global economy will see a gradual recovery in 2014, led by growth acceleration” in developed economies, OPEC’s Vienna-based secretariat said in its monthly market report. “A key determinant for this increase in world oil demand will be the pace of growth in the emerging economies.”
West Texas Intermediate, the American benchmark crude, advanced to a four-month high of $104.92 a barrel on March 3 amid signs that recovery is gaining momentum in the U.S., the world’s largest oil consumer. Prices have subsequently slipped, trading at about $98 a barrel today, amid concern that growth may slow in emerging economies such as China.
Global oil consumption will increase by 1.14 million barrels a day, or 1.3 percent, this year to an average of 91.14 million a day, according to OPEC’s report. That’s 50,000 a day more than the estimate in last month’s report.
Iraq’s production jumped by 400,000 barrels a day to 3.4 million a day in February, the highest since 1980, according to data compiled by OPEC. While data from the country’s Oil Ministry showed it reached a three-decade high in 2012, production subsequently slipped amid pipeline attacks and instability.
“There’s caution in the market about what Iraq can achieve this year,” Richard Mallinson, a London-based analyst at Energy Aspects Ltd., said by phone. “The most significant trend will be subdued growth because of infrastructure bottlenecks, bureaucratic issues and security concerns.”
Total OPEC crude production increased by 258,600 barrels a day in February to 30.1 million, the highest level since August, as Iraq compensated for reductions in Libya and Saudi Arabia, the group said. Group output is in line with its current collective target of 30 million barrels a day.
Supplies from Saudi Arabia, the world’s biggest exporter, declined by 101,900 barrels a day to 9.63 million.
OPEC also raised estimates for supplies from outside the group in 2014, by 30,000 barrels a day. Non-OPEC producers, led by the U.S., Canada and Brazil, will increase production by 1.31 million barrels a day to 55.49 million a day.
OPEC’s 12 members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the U.A.E. and Venezuela. The group will next meet on June 11 in Vienna to discuss output targets.
The International Energy Agency, the Paris-based adviser to oil-consuming nations, will release its monthly report with forecasts of supply and demand on March 14.