OPEC Sees Higher Demand, More Oil Pumping in 2013
OPEC predicted world oil demand will grow more quickly in the rest of 2013 and indicated the group can keep pumping more oil than the ouptut target it retained at a May 31 meeting without over-supplying the market.
The Organization of the Petroleum Exporting Countries in a monthly report forecast world oil demand would expand by 900,000 barrels per day (bpd) in the second half, up from 700,000 bpd in the first six months of 2013.
"The second half of the year is expected to see higher demand," said the report by OPEC's economists. "In terms of demand growth, the expected global economic recovery in the second half of this year could also add more barrels to seasonally higher global consumption."
With oil prices near the group's preferred level of $100 a barrel, OPEC at a May 31 meeting agreed to retain its output target at 30 million bpd, leaving the door open for informal supply tweaks by top exporter Saudi Arabia depending on demand.
OPEC has been pumping above the target and in May. Supply rose by 106,000 bpd to 30.57 million bpd, according to secondary sources cited by the report, led by Saudi Arabia which typically pumps more in summer to meet domestic air conditioning demand.
Still, the report said that output rate was broadly in line with OPEC's estimate of the average demand for its crude in the second half of 30.47 million bpd - meaning most of the surplus will be absorbed rather than head into inventories.
"Overall, existing fundamentals portray a market with ample supply, which is further reflected in comfortable crude oil stock levels," the report said.
OPEC reiterated its familiar warning of downside risks to the demand outlook from weak economic growth.
For 2013 as a whole, it forecast world oil use would grow by 780,000 bpd, slightly lower than 790,000 bpd previously expected.
The report is the first of this month's three prominent oil supply and demand forecasts to emerge. The U.S. government's Energy Information Administration - at present more bullish on demand growth than OPEC with a forecast of 890,000 bpd - issues its report later on Tuesday.
The International Energy Agency's monthly update is due on Wednesday.