London (Platts)--12Jun2007

World oil supply fell to 84.94 million b/d in May, down from an estimated
85.5 million b/d in April on the back of lower OPEC crude output, the
International Energy Agency said Tuesday.

     OPEC output fell to 30.07 million b/d from 30.49 million b/d the previous
month, the IEA said its its latest monthly oil market report, largely due to
falls in production from Iraq and Nigeria.

     Iraqi output fell to 2 million b/d from 2.1 million b/d, the agency said.

     Excluding Iraq and new OPEC member Angola, which does not yet take part
in the group's production accords, the ten remaining OPEC countries pumped an
average of 26.51 million b/d, down from 26.8 million b/d in April but still
well above their collective target of 25.8 million b/d.

     Nigeria's output was hit by shut-ins at sites across the restive Niger
Delta in May, with the volume of production affected by a spate of attacks
reaching as much as 1 million b/d at times, the IEA said.

     As a result, the country's production fell to 2.01 million b/d from 2.25
million b/d in April, taking it to its lowest level since early 2003.

     Outside OPEC, the IEA trimmed its forecast for non-OPEC supply this year
to 50.2 million b/d, down 110,000 b/d from its previous projection. This would
leave year-on-year growth in non-OPEC supply of 900,000 b/d, more than double
the increase of 400,000 b/d seen last year.

     Nearly 95% of the expected growth in non-OPEC supply this year comes from
the former Soviet Union, non-OPEC African countries and biofuels, the IEA
said, offsetting continued declines in the North Sea and non-OPEC Middle East
producers.