OPEC Says 2015 Demand for Its Crude Will Be Weakest in 12 Years

By Grant Smith

Photographer: Thomas Imo/Photothek via Getty Images

Khurmala oil field close to the Iraqi town Makhmour

OPEC cut the forecast for how much crude oil it will need to provide in 2015 to the lowest in 12 years amid surging U.S. shale supplies and reduced estimates for global consumption.
The Organization of Petroleum Exporting Countries lowered its projection for 2015 by about 300,000 barrels a day, to 28.9 million a day. That’s about 1.15 million a day less than the group’s 12 members pumped last month, and the 30-million barrel target they reaffirmed at a meeting in Vienna on Nov. 27. The impact of this year’s 40 percent price collapse on supply and demand remains unclear, OPEC said.
“The downward revision reflects the upward adjustment of non-OPEC supply as well as the downward revision in global demand,” the group’s Vienna-based research department said in its monthly oil market report.
Brent crude futures collapsed to a five-year low of $65.29 a barrel in London yesterday amid speculation that OPEC’s decision to maintain output levels
despite swelling North American supplies will intensify the glut in global oil markets.
Demand for OPEC’s crude will slump to 28.92 million barrels a day next year, according to the report. That’s below the 28.93 million required in 2009, and the lowest since the 27.05 million a day level needed in 2003, the group’s data show.

Photographer: RJ Sangosti/The Denver Post via Getty Images

Brent crude futures collapsed to a five-year low of $65.29 a barrel in London yesterday... Read More

November Dip

Output from the 12 members declined by 390,000 barrels a day in November to 30.05 million a day amid lower production in Libya, according to data from analysts and media organizations referred to in the report as ‘‘secondary sources.”
Libyan output dropped last month by 248,300 barrels a day to 638,000 a day. Pumping at the Sharara oil field, the country’s biggest-producing asset, and the neighboring El Feel site, was halted after Sharara was seized by gunmen, according to the International Energy Agency.
Production also slipped last month in Algeria, Angola, Kuwait, Qatar, the United Arab Emirates and in Saudi Arabia, where output declined 60,100 barrels a day to 9.59 million.
The organization trimmed projections for global oil demand this year and next. World fuel consumption will increase by 1.12 million barrels a day, or 1.2 percent, in 2015 to 92.26 million a day. That’s a reduction of 70,000 barrels a day from last month’s report.
OPEC boosted forecasts for supplies outside the group in 2015 by 120,000 barrels a day. Non-OPEC supply, driven the U.S., Canada and Brazil, will expand next year by 1.36 million barrels a day to 57.31 million a day. Production from non-OPEC nations will increase this year by 1.72 million barrels a day, about 580,000 a day more than the organization’s initial estimates.
Total oil inventories in the world’s most advanced economies remained 15 million barrels higher than their five-year average in October, at 2.7 billion barrels, even as they declined by 5.1 million barrels, according to the report.