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Thu 9 Sep 2010 03:41 PM

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OPEC trims 2011 demand for oil on external supplies

Forecast about 100,000 barrels per day less than in the previous month's report.

OPEC trims 2011 demand for oil on external supplies
OUTLOOK TRIMMED: OPEC has trimmed the outlook for demand for its members crude in 2011 as production outside the group grows. (Getty Images)

The Organization of Petroleum Exporting Countries trimmed the outlook for demand for its members’ crude in 2011 as production from outside the group grows.

OPEC, responsible for about 40 percent of global supplies, predicted in a monthly report today that the world will need 28.8 million barrels of oil a day from its 12 members next year.

That’s about 100,000 barrels a day less than in last month’s report. The organization left its forecast for global oil demand in 2011 unchanged at 86.56 million barrels a day.

In the report, OPEC's Vienna based secretariat said: “Mexico, Oman and Equatorial Guinea encountered minor upward revisions."

Global consumption may weaken during the rest of this year because of “the severity of the economic crisis and its prolonged impact on the world economy.”

OPEC forecast that producers outside the organization will bolster supplies next year by 360,000 barrels a day to average 52.42 million a day.

The forecast for Mexico was boosted as the country slows output declines at older fields, while the outlook for Equatorial Guinea was raised as its Aseng and Alen fields start.

OPEC anticipates growth in global oil demand next year of 1.05 million barrels a day, or 1.2 percent, driven by consumption in Asia, Latin America and the Middle East.

As a result, consumers will still need 200,000 barrels a day more crude from OPEC in 2011 than this year, even after this month’s lowered expectation.

The International Energy Agency, the Paris based adviser to consuming nations, will publish its monthly outlook tomorrow. In last month’s report it estimated 2011 global oil consumption at 87.9 million barrels a day.

OPEC increased its compliance with output quotas set in 2008, today’s report showed, as Nigeria’s production declined.

Output from the 11 members bound by quotas dropped 37,000 barrels a day to 26.799 million barrels a day in August, it said. That implies compliance of 53.5 percent last month compared with a revised 52.6 percent for July. Iraq is exempt from the quota system.

The group has effectively reversed the supply cuts announced in 2008 as rising prices and rebounding demand encouraged members to flout their individual limits. Oil futures traded around $75 a barrel in New York today, after climbing 78 percent last year.

OPEC’s 12 members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the UAE and Venezuela. The organization’s next meeting is scheduled for Oct 14 in Vienna.

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