By GRANT SMITH
Supply losses in the Middle East and North Africa may offset
rising shale oil output and push prices higher next year, the
International Energy Agency said.
Crude prices may come under renewed upside
pressure as refiners returning from seasonal maintenance
eat into supply
already curtailed by unrest in Libya and Iraq, the agency
said Thursday in its monthly market report.
The IEA slightly increased estimates for global oil demand in
2014, and for production from outside the Organization of
Petroleum Exporting Countries, resulting in a
comfortable balance for early next year.
Production problems in Libya and Iraq, among others,
continue to relentlessly fester, and may prove more market-
supportive in a context of rising demand than they have been
during the recent refinery
overhaul season, the
Paris-based adviser to 28 nations said.
Brent futures have slipped 3.1% this year to trade at about
$107.70/bbl in London today, as protests in Libya and
instability in Iraq are balanced by a muted recovery in
Europe and signs of slowing economic expansion
in emerging economies.
Booming shale output will make the US the worlds
biggest oil producer by 2015, the IEA said in a separate
The agencys increase of estimates for world oil
consumption in 2014, by 20,000 bpd, left its forecast for
growth unchanged from last month. Global fuel use will expand
by 1.1 million bpd, or 1.2%, to 92.1 million bpd next year,
an acceleration from this year as the economic recovery
The IEA also raised project
ions for supplies from
outside OPEC in 2014, by about 100,000 bpd, to reflect
stronger-than-expected growth in the US and Russia. Non-OPEC
production will expand by 1.8 million bpd to 56.5 million bpd
next year. Last month the agency described this rate of
growth as the highest since the 1970s.
Rising non-OPEC output mean that the amount of crude required
from the 12-member group, which controls about 40% of global
supplies, will decline next year, the report showed. The call
on OPEC will fall to 29.1 million bpd in 2014, from 30
million this year. Thats about 800,000 bpd less than
the organization pumped last month.
Production from OPEC slipped about 100,000 bpd to 29.89
million bpd in October as Saudi Arabia, the biggest member,
reduced output in line with lower seasonal domestic demand,
according to the IEA. The Gulf kingdom trimmed output last
month to 9.75 million bpd, from 10.12 million, ending a
three-month spate about 10 million, the report showed.
Exports of crude from Iraq will probably remain below
capacity until the end of the first quarter next year because
of worsening security in the Basra region and bottlenecks at
the countrys Persian Gulf terminals.
While Libyan production rose by 50% month-on-month to 450,000
bpd in October, it had slipped back to 250,000 bpd by early
November amid worsening political turmoil and labor disputes,
the IEA said.
The creation of an independent oil company to control crude
sales by armed militia controlling areas of eastern Libya
was seen as largely symbolic, since there is little
chance oil traders would engage with the tribal groups,
the IEA said.
OPEC is expected to keep its supply target unchanged at 30
million bpd when officials assemble in Vienna on Dec. 4, the
IEA said, based on comments from several ministers.
OPECs own secretariat similarly characterized markets
as well-supplied in its monthly market report
yesterday. The groups members are Algeria, Angola,
Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi
Arabia, the United Arab Emirates and Venezuela.
We have a fairly balanced market in 2014, with non-OPEC
supply growth matching demand growth, Amrita Sen, chief
oil market strategist at Energy Aspects Ltd. in London, said
before the report. The call on OPEC crude falls
slightly. Our outlook for prices in 2014 is that theyll
be lower than this year, but stable and still high. There is
upside risk for the demand outlook given the improvement in
processing rates declined
in September to the lowest in more than 22 years on low
profitability and seasonal maintenance
, the IEA said.
Preliminary data for October may show that processing in the
region has decreased to the least since 1989, the agency
Total inventories of crude and refined products in
industrialized nations are closer to their five-year average
after increasing by 8.6 million bbl in September, a month
when they normally decline, to 2.7 billion bbl, the IEA
report showed. That reduced the deficit in stockpiles
compared with their average to 42.9 million bbl, from 67