World oil output rises to 85.1 million b/d in April: IEA

London (Platts)--12May2006

The International Energy Agency Friday cut its estimate for world oil
demand growth this year, saying mild weather and high prices were weighing on
demand in the most important consuming regions.
In its latest monthly oil market report, the Paris-based IEA said it now
expected world demand for oil to rise by 1.25 million b/d this year, down from
a previous projection of 1.47 million b/d.
In outright terms, the IEA expects demand to average 84.83 million b/d in
2006, up from 83.59 million b/d in 2005.
The downward revision to demand growth was mainly attributable to a
weaker picture of US demand than had previously been implied by preliminary
weekly data and high exports from the former Soviet Union, which have had the
effect of reducing apparent demand.
"Although the global economy posted strong growth in the first quarter of
2006, mild temperatures and high prices weighed on demand in most key
consuming areas," the IEA report said.
The agency made little change to its forecasts for demand in China, the
world's second-largest oil user, where consumption is expected to grow by 5.3%
to an average of 6.93 million b/d in 2006.
On the supply side, the IEA estimated world oil supply at 85.1 million
b/d in April, up 485,000 b/d from April. Output increases of 100,000 b/d or
more came from OPEC, the FSU, Africa and North America, partly offset by lower
North Sea volumes due to offshore field maintenance.
OPEC crude production rose t0 30.04 million b/d last month from 29.87
million b/d in April, the IEA said, mainly on the back of higher output from
Iraq and Nigeria.
Output by the ten OPEC members bound by a collective output ceiling of 28
million b/d was 28.02 million b/d, down marginally from 28.06 million b/d.
For 2006 as a whole, the IEA expects non-OPEC production to rise to 50.1
million b/d, up 1.18 million b/d from last year, an increase of 30,000 b/d
from its previous forecast.
Production from Russia, the biggest non-OPEC producer, is estimated at
9.62 million b/d in April, and "seems to have recovered modestly from the
weather-related disruptions seen in January and February," the IEA said.
Russian output is expected to grow by 2.5% this year, the report said,
down from a growth rate of 2.7% in 2005 and a much higher average annual rate
of 9% between 2000 and 2004.
As a result of the downwards revisions to demand this year, the IEA
reduced its 'call' on OPEC crude and stocks for 2006 to 29.2 million b/d, down
200,000 b/d from its previous projection and some 840,000 b/d below the
cartel's estimated output last month.

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