OPEC’s production remains higher than next year’s global requirement for its crude, the exporter group said on Tuesday, even after Saudi Arabia cut production from a record high level.
The monthly report from the Organization of the Petroleum Exporting Countries adds to signs that increasing supply from the United States, enjoying a shale energy boom, and other non-OPEC countries will weigh on OPEC’s market share in 2014.
OPEC forecast demand for its oil in 2014 will average 29.57 million barrels per day (bpd), unchanged from its previous estimate. The group pumped 29.89 million bpd in October, according to secondary sources cited by the report.
That suggests inventories will build up further in 2014 if the group keeps output at October’s rate, although the amount of excess supply has fallen from earlier this year when OPEC output was well above 30 million bpd.
Oil stocks in developed countries that are members of the Organisation for Economic Co-operation and Development (OECD) and emerging nations already show that consumers have enough oil, OPEC said.
“The current healthy number of days of forward cover in the OECD combined with data showing an ongoing expansion in non-OECD stocks highlight the fact that the market is well supplied,” OPEC said in the report.
This is the last report before OPEC meets on December 4 to decide whether to change its nominal production target of 30 million bpd. With oil prices above OPEC’s desired level of $100 a barrel, big changes in policy are not expected.
While output rose in Libya and Iraq in October, top exporter Saudi Arabia told OPEC it cut back production to 9.75 million bpd from a record rate above 10 million bpd. Industry sources said the reduction mainly reflected lower domestic demand.
Two other government reports on global oil supply and demand are due this week. The U.S. Energy Information Administration issues its report on Wednesday and International Energy Agency, adviser to industrialized countries, on Thursday.