OPEC's share of the global oil market is set to diminish further next year as surging supplies of oil from the US and other non-OPEC producers outpaces an expected acceleration in world oil demand growth, the International Energy Agency said Thursday.
Releasing its first detailed oil demand forecasts for 2014, the IEA said global oil demand is forecast to grow by 1.3% to reach 92 million barrels a day in 2014, underpinned by a stronger global economy.
The estimate represents demand growth of 1.2 million b/d above this year's projected growth, which is now estimated at 930,00 b/d, the IEA said in its latest monthly report.
Non-OECD demand continues to lead global growth, outstripping declining demand in OECD countries, and is forecast to grow by 1.4 million b/d to 46.5 million b/d in 2014 from 45.1 million b/d this year, the IEA said.
China, the world's main demand growth engine, is predicted to see a "modest acceleration" in demand of 3.9% next year, taking oil demand in the world's second biggest oil consumer to around 10.3 million b/d.
In the US, the world's biggest oil consumer, demand is seen dipping by 0.1% to 18.6 million b/d next year as efficiency gains continue to dampen the country's demand outlook, IEA said.
IEA forecast a slowdown in OECD demand contraction, reflecting expectations that OECD economies will, on average, return to growth in 2014. But it also flagged "significant risks" over the demand outlook because of macroeconomic uncertainty.
"Given the current state of the world economy, however, particularly heightened risks surround forecasts of both economic progress and oil consumption," the IEA cautioned.
For 2013, the IEA raised its oil demand forecast by 220,000 b/d to 90.8 million b/d reflecting revisions from unseasonably cold late-winter weather in the second quarter of the year.
SURGING NON-OPEC SUPPLY
On supply, the IEA said non-OPEC oil production should increase by 1.3 million b/d in 2014, the highest growth in 20 years, reaching 55.9 million b/d.
North American supply alone is expected to grow by close to 1 million b/d, but other countries including Brazil and Kazakhstan are also set to contribute, the IEA said.
US crude production is forecast to add 530,000 b/d to non-OPEC supply and Canada's oil sands projects are projected to add another 140,000 b/d, the IEA said.
Despite the current political turmoil in Egypt, the IEA said it has not adjusted the production outlook for the county in either 2013 or 2014, but is "closely monitoring" events and may adjust estimates accordingly.
Egypt, which produced 730,000 b/d of liquids in 2012, is also a key transit area for both crude and refined products between the Red Sea and the Mediterranean.
Largely as a result of the surging light, tight oil output from US and Canadian oil sands, the IEA estimated that the average "call" on OPEC crude and stocks next year will fall 200,000 b/d, compared with 2013, to 29.4 million b/d.
For 2013, the IEA adjusted its "call on OPEC crude" for the first six months 350,000 b/d higher to reflect the weather-related upward revision in Q2 demand.
For the full year, the call on OPEC crude was raised by 100,000 b/d, to 29.6 million b/d.
On Wednesday, OPEC estimated that demand for its oil would total 29.61 million b/d in 2014, representing a year-on-year drop of around 250,000 b/d after an anticipated fall of 420,000 b/d this year.
In May, the IEA said in its medium term oil market report that it expects the call on OPEC's oil to slip to a low of 29.19 million b/d in 2015 before starting to recover to above 30 million b/d. In 2012, the IEA estimated the call on OPEC oil at 30.12 million b/d.
The IEA said OPEC crude production slipped 370,000 b/d to 30.61 million b/d in June because of worsening supply disruptions in Libya, Nigeria and Iraq.
OECD commercial oil inventories built seasonally by a "relatively weak" 4.8 million barrels to 2.68 billion barrels in May, the IEA said.
Following recent downward revisions to inventories, OECD oil stocks appear to have remained at a "small deficit" to five-year-average levels since January 2013, IEA said. At the end of May. the deficit stood at 12.9 million barrels, IEA estimated.
