Oil supply will outstrip rising global demand in 2014
Bloomberg News
LONDON — Oil supply will outstrip a surge in demand growth next year as production outside of OPEC expands at its fastest pace in 20 years, the International Energy Agency predicts.
World oil consumption will climb by 1.2 million barrels a day next year, up from 930,000 a day in 2013, the IEA said in its first monthly report with forecasts for 2014.
Supplies from outside the Organization of Petroleum Exporting Countries will jump by 1.3 million barrels a day amid boom- ing North American output, shrinking the need for crude from the 12-member producer group, the report said.
The assessment should “give bulls some cause for alarm,” the Paris-based adviser to oil-consuming nations said. “While demand growth is also forecast to pick up momentum,” this “will still fall short of forecast non- OPEC supply growth.”
Brent crude has lost about 2 percent this year, trading Thursday near $109 a barrel on the London-based ICE Futures Europe exchange, as economic stagnation in Eu- rope, slowing expansion in China and threats to recovery in the U.S. constrain fuel consumption. Dependence on OPEC is dwindling as new drilling techniques enable the U.S. and Canada to unlock reserves from rock formations deep underground.
Global demand will average 92 million barrels a day in 2014, advancing by 1.2 million barrels a day, or 1.3 percent from this year, according to the IEA.
Production outside OPEC will expand by 1.3 million barrels a day to 55.9 million a day in 2014, with almost 1 million barrels of the increase coming from North America, the report said. Growth in Brazil, Kazakhstan and South Sudan will help offset declines in other non-OPEC regions.
The expansion means demand for OPEC crude will decline next year to 29.4 million barrels a day, about 200,000 a day less than will be required this year, and 1.2 million a day less than the organization pumped in June.