OPEC Raises Forecast Demand for Its Members’ Crude Oil in 2010

Dec. 15 (Bloomberg) -- The Organization of Petroleum Exporting Countries raised the estimate for the amount of crude its members will have to pump next year as world consumption recovers.

OPEC, which produces about 40 percent of the world’s oil, predicts members will need to produce 28.61 million barrels a day to satisfy demand in 2010. That’s about 100,000 barrels a day more than last month’s projection and represents an increase in 30,000 barrels a day from 2009, the first annual rise in three years.

“Following two years of sharp declines, world oil demand is expected to return to growth in 2010,” OPEC’s Vienna-based secretariat said in a monthly report e-mailed today. “Fundamentals will continue to be weak in the first half of the year before improving in the second half.”

OPEC committed to reducing supply by 4.2 million barrels a day in a series of meetings late last year to combat shrinking demand. Members including Kuwait, Algeria, Libya and Qatar have said they don’t think supply quotas will change when the group meets in Angola on Dec. 22 because oil prices remain at levels members consider satisfactory.

OPEC doesn’t forecast its own crude production, instead estimating the volume it will need to produce to satisfy world consumption, the so-called call on OPEC crude. It does this by subtracting projected non-OPEC oil supply, in addition to its own production of natural gas liquids and non-conventional oil, from forecast global oil demand.

Consumption Rise

A rise in OPEC’s estimate for world oil consumption next year contributed to most of the increase in the call in this month’s report. Global oil demand will average 85.13 million barrels a day in 2010, according to OPEC’s estimate, an increase of 820,000 barrels a day, or 1 percent, from 2009. That growth is 70,000 barrels a day more than forecast last month.

This will be partly offset by rising production from outside the producer group. Non-OPEC output is projected to average 51.27 million barrels a day in 2010, 40,000 barrels a day more than expected in last month’s report, mainly due to a revision in the estimate for 2009.

In contrast, OPEC cut the estimate for its own production of natural gas liquids and non-conventional oil in 2010 to 5.26 million barrels, compared with 5.33 million barrels forecast last month.

OPEC’s 12 members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.

OPEC Compliance

While the call increased for next year, OPEC cut its estimate for 2009 by about 70,000 barrels a day to 28.6 million barrels a day, on greater-than-expected non-OPEC production.

OPEC’s compliance with its output target dropped to 58 percent in November, from 59 percent the previous month, data from the report showed. The 11 members bound by supply quotas pumped 26.612 million barrels a day last month, compared with a formal limit of 24.845 million per day. Iraq is exempt from the quota system.

The 12 members including Iraq pumped 29.077 million barrels a day in November, 47,000 barrels a day more than October, according to OPEC data, which is based on secondary sources.