IEA Raises Estimate for OPEC Crude Demand
By Grant Smith - Jun 16, 2011 4:00 AM ET
The International Energy Agency boosted its forecast for the amount of crude that will be needed from OPEC this year as supply growth outside the group slows.
The Organization of Petroleum Exporting Countries must provide an average of 30.1 million barrels a day in 2011, the IEA said today in its monthly market report, or 400,000 a day more than it estimated last month. OPEC failed to agree an output target when it met on June 8. Demand for the group’s oil in the third quarter is about 1.5 million barrels a day more than May production levels and there are “reassuring signs” members will boost output, the IEA said.
“There is a clear need for the organization to boost supply,” the Paris-based adviser said. “There are reassuring signs that Saudi Arabia and some other producers will rise to the challenge. Without such positive developments, there is a risk” of “damaging implications” for the global economy.
Brent crude futures have advanced 20 percent this year, trading today at $113 a barrel in London, as world consumption increases and conflict halts exports from Libya, holder of Africa’s largest reserves. Saudi Arabia said June 8 that it and three other Persian Gulf exporters will keep markets adequately supplied in the absence of a collective OPEC pledge to do so.
The agency boosted its global oil demand forecasts for this year and last. World crude consumption will rise by 1.3 million barrels a day to 89.3 million a day in 2011, or 100,000 a day more than the IEA predicted last month. It raised demand projections for 2010 by an equivalent amount.
Call-on-OPEC
The 12 OPEC members pumped 29.18 million barrels a day last month, or 210,000 a day more than in April, according to the agency. The increase in May was led by Saudi Arabia, which produced 9 million barrels a day. The so-called call-on-OPEC, or the amount needed to balance world supply and demand, during the third quarter is estimated at 30.7 million a day.
Disruptions in the North Sea, North and South America and Yemen prompted the IEA to reduce its forecast for non-OPEC production in 2011 by 400,000 barrels a day to 53.3 million a day. That means supply from outside OPEC will expand by 560,000 barrels a day this year, or about half the amount of 2010.
The IEA is an adviser on energy policy to 28 nations in the Organization for Economic Cooperation and Development.
Oil stockpiles held by companies in OECD nations jumped by 34.5 million barrels to 2.67 billion in April, the agency said. That is equivalent to 59.1 days worth of consumption.
