World Oil Outlook: Consumption Increases, Inventories To Decline In 4th Quarter

Consumption. World oil consumption rose by 1.2 million barrels per day (bbl/d) in the second quarter of 2007 compared with year-earlier levels. China, the Middle East, the United States, and India accounted for most of the increase in oil consumption. EIA projects that world oil consumption will increase at a year-over-year rate of 1.8 million bbl/d during the second half of 2007 (World Oil Consumption). Recent volatility in financial markets contributes to uncertainty in the consumption projections, suggesting possible future downward revisions if the situation leads to slower economic growth than currently expected.
Non-OPEC Supply. Non-OPEC oil production is projected to grow by about 600,000 bbl/d during 2007 compared with year-earlier levels, a reduction of roughly 100,000 bbl/d from last month’s Outlook (Non-OPEC Oil Production Growth). A downward revision of 51,000 bbl/d in Mexico’s 2007 oil production is a principal cause of this change. In 2008, EIA estimates that non-OPEC petroleum production will grow by about 1 million bbl/d. The 2008 forecast is about 100,000 bbl/d lower than the last assessment due to a downward revision in projected U.S. ethanol and conventional oil output.