OPEC’s world market share will shrink in 2014 as rising supply of US shale oil gives the exporter group little comfort.
In a monthly report, the Organisation of the Petroleum Exporting Countries forecast demand for its oil in 2014 would average 29.61 million barrels per day.
The volume will be down 250,000 bpd from 2013 and 770,000 bpd less than it produced in June.
“This would imply a further build in global crude inventories, which currently stand at high levels,” OPEC said in reference to the market outlook for next year.
The report is a further illustration that technology for extracting oil and gas from shale is reducing dependence on OPEC.
Rising output will make it harder for OPEC to keep its own output at high rates without risking a drop in prices below 100 dollars a barrel, its preferred level.
OPEC also forecast a recovery in demand next year as economic growth gathers pace.
World oil use will expand by 1.04 million bpd in 2014, the strongest growth since 2010, it said.
But non-OPEC supply, the source of two in every three barrels, is expected to increase by 1.14 million bpd, more than demand, led by further growth in the United States.
The US shale boom has already curbed imports from OPEC members such as Nigeria and Algeria.
OPEC expects US oil output to rise by 560,000 bpd next year – the biggest rise among non-OPEC countries – to 11.33 million bpd.
“The outlook in 2014 is supported by anticipated healthy onshore tight oil developments, aided by rising investment,” OPEC’s report said.
“In 2013, oil drilling activities continue to improve.”
After initially downplaying shale, OPEC is looking more closely at its impact.
At its last meeting, on May 31 in Vienna, the group’s oil ministers spent some time discussing the issue and set up a committee to study it.
OPEC’s report is the second of this month’s trio of oil supply and demand forecasts to emerge.
The International Energy Agency, adviser to 28 industrialised countries, issues its report on Thursday.
Reuters/NAN.
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