OPEC crude output rises to 29.83 million b/d in May: IEA

London (Platts)--13Jun2006

The International Energy Agency Tuesday trimmed its forecast of world oil
demand growth this year to 1.24 million b/d, down marginally from a previous
estimate of 1.25 million b/d.
For the second quarter of the year, however, the IEA raised its estimate
of consumption by 160,000 b/d, saying that strong demand in China and the US
was offsetting weakness in OECD Europe and Asia.
In outright terms, the Paris-based agency expects world demand to average
84.9 million b/d this year, down 10,000 b/d from previous estimates, it said
in its latest monthly oil market report. This would be an increase from last
year's average of 83.66 million b/d.
In China, the government's decision last month to raise gasoline and
diesel prices could boost apparent demand in the near term by encouraging
refiners to supply the domestic market. "In the longer term, however, the
increase is likely to dampen demand growth to some extent," the IEA said.
Rising demand from China and other non-OECD countries is expected to
account for nearly 85% of total world oil demand growth in 2005-2006.
On the supply side, the IEA now expects non-OPEC production to average
51.2 million b/d this year, 55,000 b/d less than previously projected.
Non-OPEC supply is on course to rise grow by 1.1 million b/d this year, with
most of the increase coming from Africa, the former Soviet Union and the
category of OPEC NGLs, the IEA said.
The net effect of the minor revisions to demand and supply projections in
this month's IEA report left the 'call' on OPEC crude and stocks unchanged at
29.2 million b/d for the year, compared with 29.3 million b/d in 2005.
The call on OPEC for the second quarter of the year was revised up by
300,000 b/d to 28.4 million b/d.
The IEA estimated that the eleven-member cartel is currently pumping well
above this, producing an average of 29.83 million b/d in May, a rise of
215,000 b/d from a revised April figure of 29.61 million b/d.
The ten OPEC members bound by a nominal collective output ceiling of 28
million b/d produced 27.93 million b/d in May.
The IEA revised its estimate of Saudi Arabian production for April down
to 9.25 million b/d from an initial 9.5 million b/d on the basis of "evidence
of lower exports than original estimates showed." The agency noted Saudi oil
minister Ali Naimi's recent statement in an interview with the Wall Street
Journal that Saudi Arabia produced as little as 9.1 million b/d in April, but
said it was not clear if this was a reference to monthly average production.

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