Oil output fell in October, says Opec
Estimate for annual global demand put steady for this year and next
Posted online: Thursday, November 16, 2006 at 0212 hours IST
NOV 15: Opec, which pumps 40% of the world’s oil, said production from its members fell last month and left its estimates for annual world oil demand this year and next little changed.
The Organization of Petroleum Exporting Countries (Opec) began cutting production this month in an effort to stem price declines, following an emergency ministerial meeting on October 20. Many oil analysts, including those at the International Energy Agency, doubt Opec will achieve all the announced 1.2 million barrels a day cutback, which started officially on November 1.
The decision to cut output “seems to have largely achieved its purpose of stabilising markets and arresting the sharp fall in oil prices seen in the last few months,” the monthly oil market report from Opec’s Vienna-based secretariat said on Wednesday.
Opec’s 11 members pumped 29.447 million barrels of crude a day in October, down 1,64,700 barrels a day from September mainly because of reductions in Iraq and Iran, the report said, citing its survey of “secondary sources,” which includes estimates from news agencies and independent analysts.
In the past few days, officials from several Opec nations, including Saudi Arabia, have reiterated their pledge to make supply cuts. Opec-member Iraq was exempt from the agreed cuts. Opec left its estimate for 2006 world oil demand unchanged at 84.3 million barrels a day, and made a “minor” upward revision to its fourth-quarter estimate to 85.6 million barrels a day, the report showed.
Economic growth led by China, the world’s second-largest oil consumer after the US, will underpin a global increase in oil demand of 1.2% this year and 1.6% next year, Opec estimated. Those figures compare with the gains of 1.1% and 1.7% the IEA predicted last week in its monthly report.
Opec’s 2007 world demand estimate was raised by about 1,00,000 barrels a day from its previous prediction a month ago. “The most likely outcome for the world economy next year remains a moderate slowdown to a growth rate above 4%, but the growing uncertainties surrounding the US outlook mean that the possibility of a sharper downturn should not be overlooked,” Opec said.
The producer group also made minor changes to the estimated demand for Opec crude (call on Opec) reflecting changes in other supply and demand figures.
The organisation’s calculations show demand for Opec crude will average 28.9 million barrels a day in the final quarter of this year, which is 2,00,000 barrels a day more than its previous estimate.
—Bloomberg
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