Oil output growth outside the Organisation of Petroleum Exporting Countries (Opec) could to strain global supplies this year, the International Energy Agency (IEA) has said.
In a monthly report released last week, the IEA cut its forecast for non-Opec supply growth by 175,000 barrels per day (bpd) to 910,000 bpd, pointing to prolonged disruptions in Organisation for Economic Cooperation and Development (OECD) producers and lower expectations for Russia.
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The IEA, which is the international adviser on energy policy to industrialised nations, said slower growth outside Opec would allow a greater role for the cartel in supplying the rapidly expanding 84 million bpd world oil market.
The report said that non-Opec production growth is expected to slow to 0.9 million bpd in 2005, leading to a tightening of the market from initial forecasts.
“While this will be supplemented by growth in non-conventional supplies and Opec natural gas liquids, in terms of the call on Opec, the outlook is similar to 2004,” it added.
Last year saw the greatest call on Opec crude in a generation, as fast growth in demand stretched global supply capacity and fuelled a 34 per cent leap in prices.
Some oil analysts predicted that high oil prices, such as the $45-$50 range now seen for US crude futures, would bring rapid growth in non-Opec supplies and precipitate a market collapse.
But oil’s six-year price boom has failed to open the floodgates and a lag in non-Opec supply growth has heightened the need for the cartel’s own supplies.
The IEA raised its forecast call on Opec crude for the year by 300,000 bpd to 28.3 million bpd.
Last year’s average call was 28.2 million bpd. The IEA said the impact of slow non-Opec output growth would be most keenly felt in the first two quarters this year.
The latest monthly data showed total world supply in January was 1.4 million bpd above year-ago levels, with 860,000 bpd of that being extra Opec crude, and 160,000 bpd being extra non-Opec production.