UPDATE 1-OPEC sees weaker demand for its crude in 2013
LONDON, Jan 16 (Reuters) - OPEC expects demand for its crude to be lower than expected in 2013 because of higher supply from rival producers, indicating inventories could build up substantially if the producer group maintains current output.
The Organization of the Petroleum Exporting Countries' monthly report indicated world supply will comfortably outstrip demand in the first half of this year, even after top exporter Saudi Arabia cut its production in December to fend off a supply overhang and defend prices well above $100 a barrel.
It forecast demand for OPEC crude this year would average 29.65 million barrels per day, down 100,000 bpd from last month. This is less than OPEC's December production of 30.37 million bpd as estimated by secondary sources.
Demand for OPEC crude will average 29.07 million bpd in the first half of 2013, the report estimated, implying inventories could build up by about 1.3 million bpd should OPEC maintain December's output rate.
OPEC has a target for its 12 members to produce 30 million bpd. With prices above Riyadh's preferred $100 but with expectations of slower demand in early 2013, OPEC at a meeting in December left the target unchanged, leaving the door open to informal supply tweaks depending on demand.
Saudi Arabia told OPEC it produced 9.025 million bpd in December, down from 9.49 million bpd in November, confirming figures provided last week by an industry source familiar with Saudi policy.
Record Saudi output last year of up to 10 million bpd helped to cushion the impact of Western sanctions on Iran over its nuclear programme by helping to bring prices down from a 2012 high of $128 in March.
The other significant cutbacks in OPEC output in December were due to technical and political setbacks in Iraq, the world's fastest-growing exporter, and the impact of the sanctions on Iran.
Other OPEC producers may not join Saudi Arabia in voluntarily curbing output. The United Arab Emirates sees no need to do so since the market is well balanced, the country's oil minister said on Wednesday.
(Reporting by Alex Lawler; editing by William Hardy)