The International Energy Agency and the Organization of Petroleum Exporting Countries have revised their forecasts for 2009 oil demand and supply in their latest monthly oil market reports. All the revisions were downward.
The Paris-based IEA has lowered its forecast for 2009 non-OPEC supply growth to zero following a new look at ongoing problems, including gas leaks and power outages, at Azerbaijan’s offshore Azeri-Chirag-Guneshli complex in the Caspian Sea.
In its previous monthly oil market report, IEA had forecast that non-OPEC supply would grow 380,000 b/d this year. This month’s revision leaves 2009 output flat from 2008, averaging 50.6 million b/d.
In contrast, OPEC now projects in its March oil market report that 2009 non-OPEC oil supply will increase 400,000 b/d from 2008 to average 50.7 million b/d. This new estimate is a downward revision of 200,000 b/d from the organization’s previous assessment, however, mainly due to revisions to the output forecasts for Mexico, Norway, Russia, and the UK, OPEC said.
Demand outlooks
IEA slightly lowered its global oil demand forecast to average 84.4 million b/d this year, a contraction of 1.2 million b/d from 2008 due to a reassessment of demand prospects in the former Soviet Union, Asia, and North America. This includes a cut of 130,000 b/d from Russian 2009 demand amid signs that economic slowdown there is gathering pace.
Meanwhile, OPEC forecasts that 2009 worldwide oil demand will decline 1 million b/d from last year. This is a 400,000 b/d downward revision from the organization’s previous forecast.
OPEC said the revision takes into account the continued deterioration in the world economy and the accompanying erosion in demand growth, noting that the decline in demand will extend across all regions except the Middle East and China.
Oil demand in the Organization for Economic Cooperation and Development countries is expected to decline 1.3 million b/d this year, while demand outside the OECD is projected to increase only 300,000 b/d from a year ago, according to OPEC projections.
February supply
IEA estimates that global oil supply in February averaged 83.9 million b/d, down 1 million b/d from January and down 3.4 million b/d from a year earlier. OPEC crude supply, at 28 million b/d, was down 1.1 million b/d from January.
The agency said a concerted effort by some OPEC members to rein in production in line with lower output targets and, to a lesser extent, operational disruptions in other countries, led to near 80% compliance last month with the cumulative 4.2 million b/d target cuts agreed since September 2008.
Full compliance with agreed supply cuts would take OPEC output 1.6 million b/d below the 2009 call on OPEC crude, implying a potential draw in OECD stocks. Such full compliance would tighten the market even without further cuts to the target at the Mar. 15 meeting, IEA said.
