IEA Cuts 2010 Non-OPEC Supply View on North America

Dec. 11 (Bloomberg) -- The International Energy Agency cut its forecast for oil supplies from outside the Organization of Petroleum Exporting Countries next year because of delays to North American projects.

Non-OPEC producers, accounting for about 60 percent of the global total, will provide 51.6 million barrels a day in 2010, or 265,000 barrels a day less than previously anticipated, the adviser to 28 nations said in its monthly report today. Projections for non-OPEC supply through to 2014 were boosted as higher investment restores delayed projects.

“Some changes were made to crude project start-up dates, especially in the Gulf of Mexico, resulting in downward revisions there,” the agency said. Supplies of natural gas liquids, or NGLs, from North America will be lower than the IEA had predicted.

The IEA raised its forecast for 2010 global oil demand and boosted its medium-term consumption outlook through to 2014, on expectations of economic recovery.

Worldwide oil demand is likely to average 86.3 million barrels a day next year, 130,000 a day more than previously estimated, the adviser said. Between 2009 and 2014 demand will average 1.9 million barrels a day more than the agency’s last medium-term projection in June.

The IEA attributed the change to “much stronger-than- expected oil demand growth in 2009 as a result of massive fiscal and monetary stimuli implemented by governments across the world” and higher growth expectations from the International Monetary Fund.

Demand Increase

Demand worldwide will increase by 1.5 million barrels a day, or 1.7 percent, in 2010 compared with this year, led by China and India, it said. The agency left demand estimates for this year unchanged at 84.9 million barrels a day.

“A key risk to the forecast pertains to the U.S. outlook,” the report said. “Demand remains stubbornly sluggish, with a continued contraction in distillate deliveries and very modest growth in gasoline demand.”

Between 2008 and 2014 non-OPEC supply will expand by 700,000 barrels a day to average 51.4 million a day, compared with a decline projected in the IEA’s last medium-term report in June.

“The outlook for supply overall has improved, with a higher price assumption and a widespread perception that the worst of the global economic crisis is over,” the report said. “Many upstream projects are back on the drawing board.”

Output from OPEC, due to meet in Angola on Dec. 22 for a review of quotas, climbed to its highest in a year during November, averaging 29.1 million barrels a day, the IEA said. A lull in militant attacks on oil facilities in Nigeria was behind the increase.

The compliance rate among the 11 OPEC members subject to production quotas slipped to 58 percent last month from 60 percent in October, with Iran and Angola violating their limits most, according to the agency.