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Sun 12 Dec 2010 12:09 PM

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IEA underestimating OPEC output call in 2011- JP Morgan

IEA predicts OPEC may produce 29.5 million barrels crude oil per day next year

IEA underestimating OPEC output call in 2011- JP Morgan
Increasing demand could put pressure on OPEC to boost supply early next year, the IEA said.(Getty Images)

The International Energy Agency may be underestimating its outlook for OPEC crude oil production next year, JPMorgan Chase & Co said in a note.

The Paris-based agency estimated that the Organisation of Petroleum Exporting Countries may produce 29.4 million barrels a day this year and 29.5 million barrels a day next year, JP Morgan said, citing an IEA Oil Market Report on December 10.

“With our higher demand forecasts, we see a higher call over this period,” said Lawrence Eagles, a New York-based analyst for the US bank in a note dated December10. He didn’t give details.

Crude use worldwide will average 88.8 million barrels a day next year, about 260,000 barrels more than its previous forecast, the IAE said on December 10 in its monthly Oil Market Report. Increasing demand could put pressure on OPEC to boost supply early next year, the IEA said.

Oil will advance to $120 a barrel before the end of 2012 and average $93 a barrel next year on consumption by emerging economies, JPMorgan said on December 3.

OPEC, which supplies about 40 percent of the world’s oil, kept its output targets unchanged yesterday, betting supplies in storage and a fragile global economic recovery will prevent crude from surging. Its 12 members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.

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