OPEC further lowered the forecast demand for its crude in the fourth quarter and 2014, and said its production remained higher than next year’s global requirement despite a plunge in Iraqi and Libyan output.
The outlook could point to a challenging 2014 for the Organization of the Petroleum Exporting Countries. Rising rival output will make it harder for it to keep its own production at high rates without risking a drop in prices below its preferred level of $100 a barrel.
In a monthly report, OPEC forecast demand for its oil in 2014 will average 29.56 million barrels per day (bpd), down 50,000 bpd from its previous estimate.
OPEC also sees lower demand for its crude in the fourth quarter — when demand usually reaches an annual peak due to the Northern Hemisphere winter — and painted a bearish picture on the prospects for refined fuels.
“Despite the more positive outlook for the US and Europe, global product markets are expected to come under pressure over the winter season,” the report, from OPEC economists, said.
“The combination of sluggish demand and increasing product supplies are likely to dampen margins, leading to lower refinery runs over this period.”
Demand for OPEC crude in the fourth quarter of 2013 is expected to average 30.49 million bpd, 230,000 bpd less than previously forecast.
According to secondary sources cited in the report, OPEC pumped 30.05 million bpd in September despite a drop in Iraqi and Libyan supply, leaving output 490,000 bpd more than next year’s demand forecast.
Saudi Arabia kept its output above 10 million bpd for a second month, according to the report, helping to cover shortfalls caused by strikes and protests in Libya and construction work at Iraq’s main export terminal.
OPEC, which pumps more than a third of the world’s oil, meets on Dec. 4 in Vienna to decide whether to adjust its output target of 30 million bpd.
In an interview on Oct. 1, OPEC Secretary General Abdullah Al-Badri said he was comfortable with the 2014 market outlook and the forecast demand drop for OPEC oil was not large, a sign the group may not make big policy changes in December.
In Thursday’s report, OPEC left estimated growth in world demand next year at 1.04 million bpd, while leaving the non-OPEC supply forecast almost unchanged at 1.21 million bpd.
The United States, undergoing a shale energy boom, is expected to be a major contributor to next year’s supply growth.
OPEC’s report is the second of this month’s trio of oil supply and demand forecasts.