Non-OPEC Output Rose in November
Weakening OPEC's Role in Oil Market
Dow Jones Newswires
December 13, 2001
NEW YORK -- Crude-oil production from countries outside of the Organization of Petroleum Exporting Countries surged in November and will continue to climb next year, weakening OPEC's role in a stagnating world oil market, the International Energy Agency said.
The Paris-based energy arm of the Organization for Economic Cooperation and Development said in its monthly oil-market report that strong growth in supplies from non-OPEC countries in November overwhelmed OPEC efforts to limit production in order to boost prices.
OPEC members, excluding Iraq, which is under United Nations sanctions, trimmed production in the month by 290,000 barrels a day, to 23.7 million barrels a day, still 500,000 barrels in access of agreed daily-output quotas. But a sharp rise of 630,000 barrels a day in non-OPEC supplies from countries like Russia, Angola and Kazakstan more than compensated for the OPEC cutback.
Stung by continued output increases by non-OPEC countries, the cartel last month agreed to cut production quotas by 1.5 million barrels a day effective Jan. 1, but only on the condition that countries outside the organization contribute supply cuts equal to 500,000 barrels a day. Big non-OPEC oil exporters such as Norway and Mexico are supporting the call, offering cuts of 100,000 to 200,000 barrels a day. Russia, the world's second-biggest exporter after Saudi Arabia, has increased its offering to 150,000 barrels a day from an initial minuscule contribution of 30,000 barrels a day, but the figure is less than the daily reduction of 300,000 barrels OPEC had in mind. OPEC officials said the 500,000-barrel target hasn't yet been met, and oil markets have been roiled in recent days by concerns over whether OPEC will go ahead with the Jan. 1 cut.
Concerns over soaring non-OPEC output have been heightened by the near halt in growth of oil demand amid a global economic slowdown.
1OPEC Delays Production Cuts in Hopes Russia, Other Countries Keep Promises (Dec. 7)
2Russia Will Cut Oil Output, but Not Much; Move Staves Off Price War, Placates OPEC (Dec. 6)
The IEA projects world oil demand will rise just 140,000 barrels a day this year, to 76 million barrels a day. That is the smallest rate of growth since 1993 and down from growth of 700,000 barrels a day in 2000.
Even if non-OPEC countries make the cuts OPEC seeks, the independent producers are still on course to sharply increase output and grab a larger share of the market next year, according to the IEA.
World oil demand is forecast to average 76.6 million barrels a day in 2002, up 600,000 barrels a day from this year. But non-OPEC supplies, led by Russia, are expected to increase 900,000 barrels a day. Russia's output, which is estimated to have risen this year by 520,000 barrels to 7.02 million barrels a day, is projected to rise a further 430,000 barrels to 7.45 million barrels a day next year. The increase would put Russia ahead of Saudi Arabia as the world's biggest producer. Russia and Canada, which is expected to raise output by 220,000 barrels a day next year to 2.96 million barrels a day, account for more than 70% of the expected non-OPEC supply rise, the IEA said.
The agency said that non-OPEC production forecasts aren't likely to be significantly altered as long as North Sea Brent crude, currently near $18 a barrel, stays above $15.
"The consensus view is that 2002 oil demand will be higher than 2001," the IEA report said. "How much higher is a matter of speculation. All things being equal, we know that overall crude supply is set to increase in 2002, and that this increase exceeds current expectations for growth in demand." |
