Peak Oil is You
Donate Bitcoins ;-) or Paypal :-)
Page added on May 15, 2014
OPEC must hit its output target to balance oil market
* Global oil demand growth forecast raised slightly for 2014
* IEA demand forecast higher than estimates from OPEC, U.S.
* Cuts estimate for 2014 non-OPEC supply growth by 100,000 bpd
* Estimate of 2014 demand for OPEC crude by 200,000 bpd (Adds detail throughout)
OPEC needs to pump more oil this year to reach its target of 30 million barrels per day and meet rising demand as China builds its reserves and stocks in industrialised countries remain low, the International Energy Agency said on Thursday.
World oil demand growth will be slightly higher than previously thought in 2014, at 1.32 million barrels per day (bpd), the IEA said in its monthly Oil Market Report, offering a more bullish demand outlook than other government forecasters.
Turmoil in producers such as South Sudan and problems at Kazakhstan’s Kashagan field and elsewhere saw the West’s energy watchdog cut its estimate for non-OPEC supply growth by 100,000 bpd to 1.5 million bpd for the year.
That will result in demand for OPEC crude rising to about 30 million bpd this year, the IEA said, a 200,000 bpd increase on its previous estimate and in line with the exporter group’s own output target.
“Crude prices remain elevated and forecast balances call for a significant rise in OPEC production from current levels for the second half of the year,” the report said.
“While OPEC has more than enough capacity to deliver, it remains to be seen whether it will manage to overcome the aboveground hurdles that have plagued some of its member countries lately.”
Turmoil in Libya and other OPEC members has hampered crude oil supplies in recent years. However, the IEA said the Organization of the Petroleum Exporting Countries (OPEC) produced 29.9 million bpd in April, a monthly increase of 405,000 bpd led by Iraq, Saudi Arabia, Kuwait and Algeria.
The agency, which advises the United States and other industrialised countries on oil policy, said OPEC was expected to keep its output target unchanged when it meets in Vienna on June 11, a level it said would be insufficient in the second half of this year when consumption increases.
“In order to balance forecast demand, OPEC countries would need to hike thirdquarter production by another 900,000 bpd from April levels,” it said.
“Whether Libya can keep its ports open and unlock its exports is unclear. Meanwhile, Iraq faces renewed security threats in the north, while outside OPEC new politicallydriven disruptions have intensified in Colombia and South Sudan.”
The IEA said a surge in Chinese imports suggested that the world’s number two oil consumer was building its strategic reserves of oil, which could tighten global markets.
OECD commercial stocks rose by 52.1 million barrels in April, trimming their deficit to the five year average, it said, though those inventories remain tight by historical standards.
The Paris-based IEA’s projection for oil demand growth comes in above those of the other two main government forecasters.
In its latest report, U.S. Energy Information Administration trimmed its forecast for world oil demand growth this year by 50,000 bpd to 1.18 million bpd.
OPEC estimates 2014 oil demand rising by 1.14 million bpd.
12 Comments on "OPEC must hit its output target to balance oil market"
rockman on Thu, 15th May 2014 9:41 am
I do have to wonder if such projections of supply vs demand are comparable to estimating how many angels can dance on the head of a pin. Forget the smaller adjustments and consider the 200,000 bopd variable. That represents a whopping 0.2% of current global production. And then add the other assumption: global oil consumption not only depends heavily on the price of oil but also the economic condition of the global economies. So to even accept that tiny % variation as viable one has to believe in the IEA ability to accurately predict future oil prices and global economic activity. And none of that addresses the basic question of what the maximum oil production will be years down the road.
Are world leaders really basing any of their policies on such projections? The angel head count seems simple by comparison.
Northwest Resident on Thu, 15th May 2014 9:56 am
China is collapsing. Their elites are buying property outside of China and getting the hell out as fast as they can. It may appear that China will be sucking up vast amounts of increased oil production based on current trends, but any current trends that we see today are simply illusions built on lies and fraud and mountains of newly printed money.
How bad off is China? Read this collection of financial news articles with commentary to find out:
theautomaticearth dot com/debt-rattle-may-14-2014-china-will-drag-us-down-with-it/
Davey on Thu, 15th May 2014 10:17 am
NR, the awfull Chinese articles are coming fast and furious. The amount of problems in China are worse than the US. Combine the two largest global economies mix around, add some Ukrainian spice, some European herbs, and Russian vodka and you got a witches brew of “Ugly”
Dave Thompson on Thu, 15th May 2014 10:47 am
Used to be that OPEC was the supply game changer turning the crude spigots on and off depending on “demand”. Now it looks like there is a question as to what OPEC can do to be a market force. I still question this whole “demand” idea in the world oil markets. OIL runs the planet’s human economy’s and the amount produced is the amount burned. Who can afford the crude is who burns the crude. If you cannot afford to buy the gas for your car you still have a personal “demand” for the stuff.
Northwest Resident on Thu, 15th May 2014 10:49 am
“The amount of problems in China are worse than the US.”
Indeed. How about that one “trivial” little fact that Nicole Foss made, that in the last two years China used more concrete than America has during its entire existence. That is a LOT of concrete, and just goes to show how intense the China financial bubble has become. When that bubble finally blows, it is going to be one big-ass boom.
Plantagenet on Thu, 15th May 2014 10:50 am
Even if OPEC can meet global oil demand next year, their production will soon start to inexorably fall as KSA and other OPEC countries reach peak oil.
GregT on Thu, 15th May 2014 11:02 am
“from 2011 to 2012, China produced more cement than the US did in the entire 20th century,”
Wow, that’s absolutely mind boggling.
Debt, debt, debt, and even more debt. Sounds like the exponential growth mantra, is finally about to meet the cold hard reality of a finite planet.
The time to finalize those plans is running out, methinks.
Northwest Resident on Thu, 15th May 2014 11:32 am
“The time to finalize those plans is running out, methinks.”
Yeah, methinks too! BTW, thanks for pulling the actual quote out of the article — I did not accurately state it in my post above — but close enough to make the point…:-)
I think the global economic collapse is going to be like one of those sinkholes in Florida — one day just when you’re thinking that you are on relatively solid ground and everything is going more or less okay, the ground is going to open up a big hole and suck your world under in a split second.
Knowing that moment is coming and being mentally and physically (and spiritually) prepare will go a long long ways toward your survival and that of those you care about.
bobinget on Thu, 15th May 2014 12:28 pm
Like the blind men inspecting that elephant, on reading above article screams “buy” (to me) as do comments.
westexas on Thu, 15th May 2014 1:42 pm
Based on the 2005 to 2012 rate of decline in OPEC’s ECI Ratio (ratio of production to consumption), I estimate that their combined post-2005 Cumulative Net Exports (CNE) are on the order of about 250 Gb*, with about 70 Gb having been shipped from 2006 to 2012 inclusive, putting estimated OPEC post-2005 CNE at about 28% depleted in only seven years.
*Total petroleum liquids + other liquids, EIA
Perk Earl on Thu, 15th May 2014 1:50 pm
The two leads stories today are OPEC must hit its output target followed by an update on the ITER. Is there a coincidental message there, that if oil does turn out to be finite (LOL) and peaking (duh), then our only hope is fusion?
westexas on Thu, 15th May 2014 2:24 pm
Based on the 2005 to 2012 rate of decline in the Saudi ECI Ratio, I estimate that Saudi post-2005 Cumulative Net Exports (CNE) are on the order of 58 Gb, and they shipped about 21 Gb from 2006 to 2012 inclusive, suggesting that they may have already shipped about 36% of post-2005 CNE, in only seven years.
As I have occasionally noted, a similar estimate for post-1995 CNE for the Six Country Case History* (based on the seven year 1995 to 2002 rate of decline in their ECI Ratio) produced an estimate for Six Country post-1995 CNE that was too optimistic.
*Six major net oil exporters that hit or approached zero net exports from 1980 to 2010, excluding China