OPEC: Oil Market Well Supplied Through 2011
Source: Platts, Margaret McQuaile & Richard Swann (7/15/10)
"Stock overhang more than enough to supply volumes needed in 2011"
OPEC's first set of 2011 forecasts expects demand for its own crude to rise by 180,000 b/d to 28.84 million b/d. But that figure is below current OPEC production.
"The overall outlook indicates that the current stock overhang would be more than sufficient to supply the additional volumes needed in 2011. Thus, the oil market is set to remain well-supplied," OPEC said in its monthly oil market report.
The June production estimate is broadly unchanged from the revised May figure of 29.198M b/d. The 11 members bound by quotas pumped 26.855M b/d in June, 62,000 b/d more than the revised May figure of 26.793M b/d and 2.01M b/d more than their 24.845M b/d target.
The estimates suggest that OPEC-11 achieved a compliance rate of just 52.1% in June with the 4.2M b/d of output cuts agreed in late 2008 and which came into effect in January 2009.
But while forecasting higher demand for OPEC crude next year, OPEC lowered its forecast of this year's call by 100,000 b/d to 28.66M b/d, saying it expected non-OPEC producers to account for more of the expected growth in global demand than it had projected a month ago.
OPEC now sees supply from independent producers at 51.86M b/d in 2010, an upward revision of 80,000 b/d, and at 52.21M b/d in 2011. The expected growth in non-OPEC supply next year is less than half the expected increase in 2010 of 740,000 b/d.
The growth in 2011 comes largely from Brazil, Canada, Azerbaijan, Colombia and Kazakhstan, offsetting continued declines from the mature oil provinces of Mexico, Norway and the UK.