The International Energy Agency, an adviser to 27 nations, said signs of rising OPEC supply have helped lower prices from a record near $100 a barrel in the past month, boosting prospects for winter heating fuel consumers.
Global demand in 2008 is forecast to rise 2.5 percent to 87.8 million barrels a day, the IEA said today in a report. That's 110,000 barrels a day more than last month's estimate. Demand for 2007 was revised lower by 60,000 barrels a day.
A growth in supplies from Iraq and Angola have added about 400,000 barrels of oil supply a day between August and November, helping offset lower supplies from the United Arab Emirates because of oil-field maintenance in November.
``We are seeing a response on the supply side,'' Lawrence Eagles, chief author of the monthly report, said in a telephone interview. ``During the winter months, we can see very large swings in demand, so the high price and recent volatility shows how finely balanced this market is.''
There are ``early indications'' of rising supplies from the Organization of Petroleum Exporting Countries in December, the Paris-based agency said. November OPEC crude supply averaged 31.1 million barrels a day, 180,000 barrels a day lower than October, the IEA said.
Global demand in 2008 is forecast to rise 2.5 percent to 87.8 million barrels a day, the IEA said today in a report. That's 110,000 barrels a day more than last month's estimate. Demand for 2007 was revised lower by 60,000 barrels a day.
A growth in supplies from Iraq and Angola have added about 400,000 barrels of oil supply a day between August and November, helping offset lower supplies from the United Arab Emirates because of oil-field maintenance in November.
``We are seeing a response on the supply side,'' Lawrence Eagles, chief author of the monthly report, said in a telephone interview. ``During the winter months, we can see very large swings in demand, so the high price and recent volatility shows how finely balanced this market is.''
There are ``early indications'' of rising supplies from the Organization of Petroleum Exporting Countries in December, the Paris-based agency said. November OPEC crude supply averaged 31.1 million barrels a day, 180,000 barrels a day lower than October, the IEA said.
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Record High
Prices have risen by about 45 percent since September and OPEC said earlier this month it wouldn't increase output further to replenish global crude stockpiles. Crude prices in New York were little changed at $92.23 a barrel at 1:34 p.m. London time today, after reaching a record $99.29 on Nov. 21.
``But $90 a barrel oil makes clear that the market is still on edge and is unlikely to relax until the peak weather risks have subsided and a clearer trend of OPEC supplies is apparent,'' the report said.
Prices for crude in New York averaged less than $90 a barrel last week for the first time since October on concern an extended economic slowdown in the U.S. would spread to the global economy. Central banks in North American and Europe this week offered up to $64 billion to financial institutions to lower borrowing costs that have tightened in recent months.
Industry stockpiles of crude oil and fuel in Organization of Economic and Cooperation and Development members fell by 22.4 million barrels in October, below the five-year average, the IEA report said.
Upward Revision
The IEA revised upward OECD stockpiles at the end of September by 22.8 million barrels, cutting the total counter- seasonal stockpile draw in the third quarter to 50,000 barrels a day, according to the report.
``We're seeing a balanced first quarter,'' said Mike Wittner, head of oil market research at Societe Generale SA in London. ``We're not going to see the price support of continued stock draws in the first quarter. Approaching $100 a barrel, these prices are sustainable.''
The ``call on OPEC,'' an estimate by the IEA of how much crude is needed from OPEC to balance global markets, was reduced by up to 200,000 barrels a day for the second half of 2007 because of weaker demand and revisions to refinery processing gain data.
For the fourth quarter of this year, the ``call'' will be around 31.7 million barrels a day, the report said.
Non-OPEC Supply
The IEA increased its estimate of non-OPEC oil production for 2008 by 45,000 barrels a day to 51.3 million barrels a day, because of the growth in biofuel use. Non-OPEC supply rose about 60,000 barrels a day to 50.2 million this year.
Saudi Arabian crude output rose to 9 million barrels a day in November, its highest level since October 2006, while Iraq produced to 2.32 million barrels a day, its second straight month above 2.3 million, the IEA said
Effective spare capacity for OPEC remains largely unchanged at 2.5 million barrels a day, the report said.
Via: Bloomberg|by Bill Murray
