OPEC to lose market share to shale oil in 2014
OPEC's report is the second of this month's trio of oil supply and demand forecasts to emerge
Click here to add International Energy Agency as an alert
Disable alert for International Energy Agency,
Click here to add Organisation of the Petroleum Exporting Countries as an alert
Disable alert for Organisation of the Petrol ...,
Click here to add Organization of Petroleum-Exporting Countries as an alert
Disable alert for Organization of Petroleum- ...,
Click here to add U.S. Energy Information Administration as an alert
Disable alert for U.S. Energy Information Ad ...,
Click here to add Vienna as an alert
Disable alert for Vienna
OPEC's share of the world market will shrink in 2014 as rising supply of U.S. shale oil gives the exporter group little comfort from the fastest growth in world demand in four years.
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 (bpd), 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 the 12-member group to keep its own output at high rates without risking a drop in prices below $100 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 U.S. shale boom has already curbed imports from OPEC members such as Nigeria and Algeria. OPEC expects U.S. 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 U.S. Energy Information Administration, as usual more bullish on demand than OPEC, in a report on Tuesday raised its 2014 demand growth estimate by 50,000 bpd to 1.24 million bpd.
The International Energy Agency, adviser to 28 industrialised countries, issues its report on Thursday.
- Will terror attacks damper Arabs' appetite for European holidays?
- So cool it's hot: Saudi Arabia's $3.2B HVACR market driven by construction boom
- US, EU protectionist policies may be a blessing in disguise for GCC suppliers
- Dubai to Doha: How far can you stretch your dirham?
- OPEC's poor history of compliance will make production cut deal a challenge
- Ducab share of oil and gas in the market is rising
- How many lost battles will it take? Saudi Arabia leads price war on US shale producers
- Who will win and who will lose? OPEC raises 2014 oil demand forecast
- Naimi is dead serious: how Saudi Arabia is winning back market share
- Revealing its cards: Keeping oil below $100 will shut shale out of market, says Saudi official