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IEA calls for OPEC oil production boost
AFP
PARIS
Petroleumworld.com 08 13 07
The International Energy Agency (IEA) on Friday called on OPEC nations to increase production to cope with an expected surge in winter demand in the northern hemisphere.
The IEA said in its monthly report that the main oil producers would have to release an extra 2.5 million barrels a day in the final quarter to keep up with higher than expected global demand.
IAE principal analyst Lawrence Eagles said there would be a "supply deficit" in the third quarter and OPEC's reluctance to increase production would hit supplies at the end of the year.
"Demand increases in the third quarter, particularly in August ... and OPEC is still restraining output, so we're in a situation where we're likely to see a supply deficit and a stock draw," he told AFP.
OPEC countries are to meet in Vienna in September to make a decision about whether to change their output quota, but members have insisted that the oil market is well supplied.
The IEA, which monitors the energy interests of the industrialised nations, predicted that stocks of crude oil in the United States would continue to fall after dramatic declines in recent weeks.
Eagles said the supply-demand deficit first noted in July would get worse in August.
The monthly report said that demand for oil from members of the Organisation for Economic Cooperation and Development (OECD) nations would increase by 0.6 percent to 49.5 million barrels a day in 2007 and by 1.7 percent to 50.3 million barrels next year.
Demand outside the OECD was expected to fall slightly from previous forecasts to 36.5 million barrels a day in 2007 (still up 3.5 percent over the year) and to 37.8 million barrels in 2008.
China is projected to average consumption of 7.6 million barrels a day in 2007 and 8.0 million in 2008.
According to IEA figures, world oil production in July was 1.1 million barrels a day higher than June at 85.3 million barrels. This was partly because OPEC deliveries were 400,000 barrels higher at 30.5 million barrels a day.
The agency attributed this to higher production in Iraq and Nigeria rather than concerted action to meet higher demand.
Since hitting the record high of 78.77 on August 1, the price of a barrel has fallen around eight dollars over the past week.
But Eagles called this a minor correction and highlighted how the price had fallen below 50 dollars in January. He said the current price around 70 dollars "indicates there is still tightness in the oil market."
AFP 10 1142 GMT 08 07
Copyright© 2007 AFP. All rights reserved.
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