World oil demand ‘to rise 1.5m bpd’
New York , March 20, 2010
Oil demand is predicted to rise by 1.5 million barrels per day (bpd) next year to 86 million bpd as world oil demand will grow faster than new supplies outside Opec's control this year, said a poll.
But stocks are likely to rise as the group is currently pumping more crude than the market needs with prices above $80 a barrel, according to a poll of 10 top oil-tracking analysts and organisations.
At the same time, the rise in production from outside the Opec and output of natural gas liquids (NGLs) from Opec members is seen growing by 900,000 bpd in total, said a report in our sister publication, the Gulf Daily News.
According to the poll, current Opec production levels are likely to see the oil market in a small surplus of 150,000 bpd this year.
In the last supply and demand poll in November, Opec's production at that time implied a small stock draw.
The producer group's output, including Iraq, was assessed in February at 29.35 million bpd, according to secondary sources in Opec's own monthly market report released last week.
The poll shows demand for Opec's crude averaging just 29.2 million bpd this year. The group decided to leave production quotas unchanged at its latest meeting on Wednesday and made little noise about member compliance, which has slipped to just above 50 per cent of the agreed cuts of 4.2 million bpd.
"We've got to watch Opec and see what they do," said Sarah Emerson, director of Energy Security Analysis.
"Unless demand starts to recover then Opec could be producing too much. I think oil prices are really high for the fundamentals."
Non-Opec output is seen averaging 51.5 million bpd, up from 51.2 million bpd last year, while Opec output of NGLs - which are not subject to the group's production quotas - is expected to rise to 5.3 million bpd, up 20 per cent since 2008.
"We believe 1.5 million bpd growth is realistic, assuming the broader economic recovery remains on track," said Francis Osborne, principal analyst at Wood Mackenzie oil consultants.
"Most of the growth will be outside the Organisation for Economic Co-operation and Development (OECD), with only slight growth in the US in the industrial sector. Around one-third of the growth will come from China."
At the end of January, the International Energy Agency assessed oil stocks in the OECD at 59.2 days of forward cover, 58 million barrels above the five-year average. TradeArabia News Service