IEA sees 2006 'call' on OPEC unchanged from 2005 at 29 mil b/d



PLATTS
LONDON
Petroleumworld.com 03 15 06

The International Energy Agency Tuesday slashed its estimate of world oil
demand growth in 2006 by 300,000 b/d, saying there was clear evidence that
high prices were eroding demand for oil in Southeast Asia.

In its latest monthly oil market report, the Paris-based IEA also cut its
forecast for non-OPEC supply this year, leaving the 'call' on OPEC crude and
stocks unchanged from last year at 29 million b/d.

The IEA now expects world oil demand to average 84.74 million b/d in
2006, down from its previous projection of 85.08 million b/d. This would mark
a 1.49 million b/d year-on-year increase, well above last year's growth in
demand of 1.02 million b/d but down sharply from the agency's previous
estimate for this year of 1.79 million b/d.

China and North America are expected to drive the increased consumption
this year, but countering this is evidence of demand weakness in Southeast
Asia, the IEA report said.

"It is becoming increasingly clear that Southeast Asia, which had been
one of the key engines of global oil demand growth, is feeling the effects of
high oil prices," the report said. The IEA noted reports that oil demand in
Indonesia could fall by as much as 20% this year due to sharp rises in retail
product prices. Thailand and the Philippines have also seen demand fall in
recent months, the IEA said.

The IEA has not changed its expectations for China, where oil demand is
expected to grow to 6.98 million b/d in 2006, up from 6.59 million b/d last
year. This would imply year-on-year growth in Chinese demand this year of
390,000 b/d, more than double the rate of 150,000 b/d seen in 2005.

On the supply side, the IEA now expects non-OPEC oil production to
average 51.3 million b/d in 2006, 200,000 b/d less than previously expected.
The reduction is due to a large cut of 500,000 b/d for the average in the
first quarter of the year on the back of a number of unscheduled outages in
the US Gulf of Mexico, the former Soviet Union, Canada, Norway and elsewhere.

Non-OPEC supply is now expected to grow by 1.2 million b/d, or 2.4%, this
year, down from a previous forecast of 1.3 million b/d. African countries are
expected to contribute 465,000 b/d, or 40% of the total.

Output from the largest non-OPEC producer Russia, which has grown rapidly
in recent years, is expected to rise by close to 3% to average 9.77 million
b/d this year.

This leaves the 'call' on OPEC crude and stocks at 29 million b/d for
2006, the same as last year's estimated level and below the cartel's current
production levels, the IEA said.

At a meeting in Vienna last week, OPEC agreed to leave current output
unchanged for the time being. The IEA said that if demand growth and
geopolitical uncertainty continued to support oil prices through June, "a
rising seasonal demand profile from then onwards could mitigate against
further official output cuts."

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Platts 03 14 06

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