LONDON: OPEC expects world oil supplies to remain ample during the northern hemisphere winter and keep a lid on oil prices, indicating the producer group is unlikely to make major changes to output at a meeting next month.
In a monthly report, the Organization of Petroleum Exporting Countries (OPEC) left its forecasts for world oil demand growth in 2011 and 2012 unchanged. It has been steadily lowering its demand outlook this year, citing weaker economic growth in developed countries and efforts by China and India to curb fuel consumption.
The report marks a further retreat from OPEC's view that a gap between supply and demand was looming later this year. Oil prices have fallen from their 2011 peak of $127 a barrel reached in April to $113 on Wednesday, pressured by the eurozone debt crisis and rising supplies.
OPEC, whose 12 members pump more than a third of the world's oil, said the recovery in output from Libya and increased North Sea output should add to supplies of high-quality crude oil, while weak demand in developed countries was keeping oil inventories at relatively high levels.
"Taking all these developments together, this should ensure that the crude and product markets remain well supplied throughout the winter season and should limit any upward pressure on prices," OPEC said in the report, which is written by economists at its Vienna headquarters.
World oil demand will rise by 880,000 barrels per day (bpd)this year to average 87.81 million bpd, and grow by a further 1.19 million bpd next year, OPEC said. Both forecasts are unchanged from the last monthly report.
OPEC meets to review output policy on Dec. 14 in Vienna. Its secretary general, speaking at a news conference on Tuesday to launch the group's 2011 World Oil Outlook, said he did not expect OPEC to increase output this year or next.
"If the market really needs more crude we are ready to supply but I don't think that OPEC will produce more than 30 million barrels a day by the end of this year and maybe also next year," OPEC's Abdullah al-Badri said.
OPEC officials and analysts have said it is unlikely the group would cut output with prices above $100 a barrel, although individual members are likely to trim some of the extra oil they provided in coming months to make way for returning Libyan output.
OUTPUT CLOSE TO EXPECTED DEMAND
Saudi Arabia and its Gulf OPEC allies raised production unilaterally after failing at the group's last meeting in June to convince other members to agree a coordinated increase to meet a shortfall in supplies from Libya.
OPEC produced 29.89 million bpd in October, little changed from September, OPEC's report said, citing secondary sources. The biggest single increase came from Libya, while there was a smaller decline in Saudi output.
The report indicates that a gap between supply and demand, forecast by OPEC earlier this year, has progressively narrowed as producers raised output and demand fell short of expectations.
While Badri has said he expects a more harmonious meeting in December, ministers could be in for some tricky negotiations if they decide to tackle the gap between their oil output target and actual supplies.
The 11 OPEC members subject to the group's output agreements, all except Iraq, pumped 27.27 million bpd in October -- almost 2.5 million bpd more than their obsolete production target of 24.84 million bpd set in December 2008, when demand was crumbling due to economic crisis.
One more OPEC report giving November output is due out before the meeting, on December 13.
Copyright Reuters, 2011
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