UAE OPEC governor sees call on OPEC crude flat to falling in 2013

Abu Dhabi (Platts)--9Jan2013/856 am EST/1356 GMT

A modest 2013 increase in global oil demand will be narrowly outstripped by rising non-OPEC supply, leaving the call on OPEC crude flat to declining, UAE OPEC governor Ali Yabhouni said Wednesday.

Addressing the Gulf Intelligence UAE Energy Forum in Abu Dhabi, he forecast global oil demand would rise by 800,000 b/d year-on-year, compared with a 900,000 b/d increase in non-OPEC supply.

"It will leave little room for OPEC producers to increase their production," he said.

On the sidelines of the conference, Yabhouni told Platts that the projections were his own.

He predicated the forecast increase in global oil demand due to a slightly higher growth in the world economy in 2013 than in 2012, due mainly to stronger growth in large Asian economies such as China and India.

Yabhouni noted a significant increase in crude stockpiles in OECD countries during the past few months, in contrast to a decline in stocks of oil products. Total OECD crude stocks stood 38 million barrels higher than the five-year rolling average, while oil product stockpiles were 18 million barrels lower than the five-year average, he said.

The OPEC governor said he held a somewhat bearish view of the international oil market in the coming year, due in part to a decline in the prices of some other globally traded commodities in the fourth quarter of 2012 following a mild recovery in the third quarter.

"This is something we need to keep an eye on. Over the long-term, oil inevitably tracks other commodities," Yabhouni said.

"None of this means that OPEC will cut back on investment," he added.

A period of slow but steady growth in global oil demand would provide producers with an opportunity to optimize investments, Yabhouni said.

"We look forward to a period of lower costs," he said.

Yabhouni, who heads the shipping subsidiaries of state-owned Abu Dhabi National Oil Company, predicted that the UAE would concentrate hydrocarbon-related investment in the near-term in "value-added" sectors including petroleum refining, petrochemicals, fertilizers and shipping.

Abu Dhabi's state oil company is responsible for more than 90% of the UAE's oil and gas output.

--Tamsin Carlisle, tamsin_carlisle@platts.com
--Edited by Jonathan Dart, jonathan_dart@platts.com